Tuesday, June 28, 2016

Corporate Bond Market

US Equity Futures are strong to start the session with the DJ Futures +175 and the S&P Futures +19. The global tone is positive across the board with all overseas markets in the green through the overnight except Hong Kong. Crude is up to $47.40/ barrel and rates are weaker with the 10yr Treasury last quoted at 1.47%. Credit is firm with the Invest Grade Index showing 87.5/88.3 and cash is also stronger.

In credit news, today is the day that the primary market will be revived post Brexit. Molson-Coors will be issuing a $4.5bln deal to fund an acquisition. MTD tallies $62.88b in IG and $21.84b priced in HY.

In economic data, there are a couple of key announcements scheduled for today. First, Q1 Annualized GDP with be reported followed by the US Consumer Confidence Index.

Municipal Bond Market   

Munis are unchanged this morning after a mixed trading day yesterday.  We saw a few aggressive trades to start the day with longer munis trading up about 10bp, however, liquidity dried up in afternoon trading.  We continue to see very few bidders in the secondary with many customers hesitant to put money to work at these levels.  Market participants will look at new issue for direction; we expect deals to price on the aggressive side which should help gauge demand.  30 day supply is unchanged this morning with $10bln on tap over the next 30 days.
PR trading remains light as we head into July payments.  The majority of the participants in non insured PR paper have been cross over buyers over the past few months.  Recent activity in other asset classes has definitely put pressure on all PR paper even though there have been no changes in the credit.  PR GOs continue to trade in mid $60s with bonds trading @ 64.50 to start the week. 

30 Day visible supply: $10bln