Wednesday, September 14, 2016

Corporate Bond Market

US Equity Futures are up to start the session with the DJ Futures +30 and the S&P Futures +4.25. The global tone is mixed with overseas equities trading mixed through the overnight throughout Europe and Asia. Oil is up to $44.91/ barrel and rates are also stronger with the 10yr Treasury last at to 1.708%. Credit feels firm with the Invest Grade Index showing 75.6/76.07 and cash is also stronger this morning.

In credit news, yesterday’s primary market saw $30.1bn priced in Investment Grade Credit and $2.25bn priced in HY Credit. Today is expected to be a little lighter in new issuance. African Development Bank is on the calendar to bring a $1bn 3yr deal today.

In economic data, US Mortgage Applications grew 4.2% last week. Also, US Aug Import prices dropped .2% over the past month.

Municipal Bond Market        
Munis continue to look to tsys for direction as we saw weakening across the curve.  This week’s move in tsys mixed with one of the largest calendars since early august has put significant pressure on the market over the past few days.  Newer deals that have priced over the past month have been hit the hardest as both dealers and customers look to get out of bonds.  Demand for this week’s deals have been spotty with the retail structured paper lacking the demand we have seen in the past.  Supply is weaker this morning with $15.75bln on tap over the next 30 days versus $19bln on Tuesday.

PR trading continues to lighten up this week with very few bidders.  We continue to see a significant amount of items out for the bid, however, very few items trading.  PR 8’s continue to drift higher with bonds trading around $67.5F after trading in the high 60s a few weeks ago.

30 Day visible supply: 15.75bln