Wednesday, August 24, 2016

Corporate Bond Market

US Equity Futures are up to start the day with the DJ Futures +8 and the S&P Futures +1.5. With the exception of China, the global tone is positive across the board. European and Asian equities are trading higher through the overnight. Oil is down to $47.25/ barrel and rates are also weaker with the 10yr Treasury last quoted at 1.554%. Credit is firm with the Invest Grade Index showing 70.912/71.339 and cash is also up.

In credit news, the primary market saw $4.45bn come to market yesterday. Swedish Export Credit Corp set to price today. August has priced just under $114bn in Investment Grade and $19.535bn in High Yield credit.

In economic data, MBA Mortgage Applications dropped 2.1% last week.

Municipal Bond Market

Munis are unchanged this morning after trading stronger over the past few days.  The high grade space seems to be the focus of most market participants as we continue to see an overwhelming amount of lower quality names stacked against each other.  New issue will remain the focus today with very light secondary trading.  The majority of today’s deals are micro deals under $100mln so we should see more SMA/retail type demand.  30 day Supply is weaker this morning with $12.3bln on tap over the next 30 days versus $14bln on Tuesday.

PR trading remains light across most debt sectors with only the most active cusips receiving attention.  We are seeing very little demand for non insured paper at the moment with only a handful of buyers.  One of the few bright spots in the non insured space has been COFINA subs which have picked up a decent retail following over the past few weeks.

30 Day visible supply: 12.3bln