Thursday, August 10, 2017

Corporate Bond Market Good Morning – Global equity markets are all negative to start this morning as geopolitical tensions between the US and North Korea have not subsided. Gold is up again, treasury yields are lower, both high yield and IG are wider, and the VIX is trading through 12 for the first time in what feels like forever. In Asia, we’re seeing the HANG SENG -16 points, NIKKEI -80 points, and CSI 300 -18.5 points. Europeans equities are also down with the FTSE -46.5 points and the Euro Stoxx 50 -16 points.

 

Stock-index futures in the US are lower with the DOW -53 points & S&P -9.5 points. The yield on the 10yr UST is down about 1 bp to 2.231% and the 30yr is at 2.814%. In Economic news, we’ll see PPI and weekly jobless claims numbers.

Muni market

Munis finished stronger on Wednesday as rates dropped and supply was limited. With Treasuries rallying, we saw the yield on the 10-year benchmark muni GO fell about 3 bps to 1.90% bringing the 10-year muni-to-Treasury ratio to 84.9%. One of the bigger deals took place in the competitive arena where the Florida State Board of Education sold $144.23 million of full faith and credit public education capital outlay refunding bonds. JP Morgan priced the deal which was rated Aa1 by Moody’s and AAA by S&P and Fitch. JP Morgan won the bonds with a TIC of 2.72%. The deal was simple and came to market as 5’s yielding 0.77% in 2018 and as 3.5’s yielding 3.16% in 2037.