Thursday, April 7, 2016

Corporate Bond Market
US Equity Futures are down to start the session with the DJ Futures -87 and S&P Futures -12. Overseas equities are mixed with all European stocks down for the most part. Swiss and Asian markets are rallying as oil holds steady at 37.85. Treasuries are up with the 10yr last at 1.73%. Credit is wider this morning with the Invest Grade Index being quoted +3 at 80.50/81.50, cash also weaker anywhere from 3-5bps depending on sector. Yesterday posted as the busiest day YTD for issuance with $7.24b pricing.

Three large high yield deals set the tone, ALLY, AMGFIN (Springleaf), and MGM, all trading up at least half a point in the gray.

The U.S. Labor Department is will be releasing jobless numbers later today.


Municipal Bond Market
Munis are stronger this morning after a mixed trading day yesterday. We saw extremely strong demand for new issuance yet again, however, the bid side faded a little in the secondary.  We expect to see strong demand in the secondary today as customers asses their cash situation after receiving new issue allocations.  Baylor Health will be free to trade later in the day and should break higher.  Maturities on the long end were up to 17x oversubscribed. 30 day supply is weaker this morning with $8.9bln scheduled over the next 30 days versus $9.4bln Wednesday.

In credit news, the Governor signed the PR debt moratorium on Wednesday putting additional pressure on commonwealth debt. Benchmark GO 8s of 2035 hit an all time low with bonds trading @ 64.25 (13.13%), after trading as high as $72 two weeks.  

30-Day visible supply: $8.9bln


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