Thursday, March 17, 2016

Corporate Bond Market
US Stock futures are down to start this morning with DJ Futures -63 and S&P Futures -7.5.   Overseas European equities are all down as the Bank of England voted to keep rates at a record low of 0.5% among a back drop of economic uncertainty and talk of leaving the EU.   Rates continue to rally with the 10yr last at a 1.864% after yesterday’s Fed rate decision.  Oil continues to hover around $39.   Credit feels firm despite the Investment Grade Index being quoted +.5 at 86/87.  We are seeing better buying from accounts to start the session.   There should be a fair amount of new issue which could change that.

So far this morning we have seen deals announced from Shinhan Bank, doing a 10yr sub deal, and AIG doing a 10yr senior deal. 

In economic data we have Current Account Balance, Philly Fed, and Initial Jobless Claims due out today.


Municipal Bond Market
Munis are stronger this morning after rallying after the Fed yesterday.  We saw extremely strong demand for new deals with Halifax Hospitals trading up 10bps in the secondary.  Demand should carry over to the secondary today as buyers digest allocations to this week’s deals and put remaining cash to work.  30-day supply is weaker this morning with $4.5bn scheduled over the next 30 days versus $7.17bn Wednesday.

PR trading remains nonexistent as the market awaits more color out of the island.  Insured paper continues to creep up with very little supply coming from BWs.  Benchark GOs traded institutionally for the first time in three days with 5mm+ trading @ $71.75 (11.72%) on Wednesday.   



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