Tuesday, April 19, 2016

Corporate Bond Market
US Equity Futures are strong to start the day with the DJ Futures +54 and the S&P Futures +9.5 in early trading. There seems to be a positive global trend through the overnight as all overseas markets are up. Oil has risen to $40.17 this morning and rates are slightly weaker with the 10yr Treasury last at 1.78%. Credit feels firm with the Invest Grade Index down to 77/78 this morning as cash continues to rally.

In credit news, today is expected to be heavy in new issuance. Yesterday’s IG issuance totaled $6.55bn and April’s IG issuance now $85.5bn, YTD $544bn; YTD sans SSA $437bn. $2.75bn HY priced yesterday, MTD 16 deals for $17.39bn, YTD 70 deals for $54.455bn. Of the new issues, we were active in ALTICE, BANK OF AMERICA, and CITI. Spreads and yields were tight across the board and most ended the session unchanged.  

In the news, Goldman Sachs reported Q1 earnings that missed analysts’ projections. The bank has publicly announced that it will be cutting back on expenses immediately.  

In economic data, the US National Association of Home Builders Market will be releasing data related to new privately owned housing units starts and permits later this morning.


Municipal Bond Market
Munis felt firmer to start the week as we continue to see demand longer out on the curve.  We saw aggressive buying in early morning trading, however demand faded later in the day.  Today will be all about the primary as we begin the order periods for a majority of the week’s deals.  In credit news, Virgin Island Powers were downgraded to B+ by Fitch. This should put pressure on all VI credits with the market hesitant on territory paper due to the current situation in PR.   30 day supply is stronger this morning with $12.3bln scheduled over the next 30 days versus $11bln on Monday.

PR trading remains light across all debt sectors as uncertainty looms ahead of July payments.   PR benchmark 8’s continue to trade in the mid $60 with 3mm bonds trading yesterday @ $67.375.

30-Day visible supply: $12.3bn


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