Tuesday, May 30, 2017

Corporate Bond Market
US Equity Futures are down to start the session with the DJ Futures -36 and the S&P Futures -4.50. Overseas equities are mixed through the overnight with European and Asian markets mostly trading lower. US Treasuries are stronger with yields on the 10 yr last at 2.236% and oil is down, last quoted $49.51/barrel. Credit is wider with the Investment Grade Index showing 44.92/46.46 and cash is also weaker.

In credit news, last week’s primary market saw $48.775bn priced in Investment Grade Credit. For the first time in history, new issuance has marked the 4th straight consecutive $30bn+ week. May’s tally is up to $168.67bn. In High Yield, May has accounted for the busiest month in new issue since March. Today is expected to be a light day in new issuance to end the month with summer approaching.

In economic data, Personal Income statistics will be reported for April.

Municipal Bond Market
The municipal supply is expected to be $4.83 bn for the short week ahead with $3.28 billion being negotiated deals and $1.55 billion being competitive. Thursday will be the big day for deals this week. On Thursday JPMorgan is set to price the Duke University Health System Inc.’s $600 million of taxable bonds in a deal rated Aa2 by Moody’s and AA by S&P and Fitch. We will also see Morgan Stanley price Connecticut’s $370 million of state revolving fund general revenue bonds in a deal rated AAA by Moody’s, S&P, and Fitch. Last but not least, Merrill is set to price the Louisiana Local Government Environmental Facilities and Community Development Authority’s $250.885 million of Women’s Hospital Foundation Project refunding revenue bonds in a deal featuring both taxable and tax-exempts. This deal is rated A2 by Moody’s and A by S&P and is also scheduled for Thursday.