Tuesday, August 23, 2016

Corporate Bond Market

US Equity Futures are up to start the day with the DJ Futures +83 and the S&P Futures +8.25. With the exception of China, the global tone is strong across the board as European and Asian equities trade higher through the overnight. Oil is weaker at $47/ barrel and rates are up with the 10yr Treasury last quoted at 1.539%. Credit is firm with the Invest Grade Index showing 70.912/71.339 and cash is also up.

In credit news, new issuance is seeing some activity after a handful of fairly dormant days. There are deals from European Investment Bank, Hyundai, Old Republic, and Swedish Export Credit Corp set to price today. August has brought just under $110bn to market in Investment Grade and $19.535bn in High Yield credit.

Municipal Bond Market

Munis are stronger this morning for the second straight day as the market continues to look to tsys for direction.  We have seen below average amounts of BWs over the past few weeks as we hit the dead of summer.  Volume across the secondary remains light as customers continue to source bonds in the primary. This week’s calendar is mostly comprised of higher quality names so we should see strong institutional demand.  Supply is stronger this morning with $14bln on tap over the next 30 days versus $11ln on Monday.

PR trading remains light across most debt sectors with very little price movement over the past month.  PR 8’s have stabilized around $65F on light volume.  The only real demand for PR paper right now is in the insured space as bonds continue to trade higher than ever.

30 Day visible supply: 14.1bln