Tuesday, August 15, 2017

Corporate Bond Market
Global equity markets are mostly higher to start the session. Asian stocks are in the green with the exception of the NIKKEI 225 which is down 10 points. The EURO STOXX 50 is up 9 points, FTSE up 32 points, and the DAX is up 19 points. US stock futures are all higher this morning with the DOW up 51 points, S&P up 5 points, and NASDAQ 100 up 17 points. With equities in the green, gold continues to fall and the VIX has dropped below 12. Fed President Dudley’s hawkish comments yesterday afternoon bumped Treasury yields up 1.5-3.5bps across the curve. Right now the 10yr stands at 2.271% which is up 5.3bps from yesterday.

Credit indices are tighter to start the week. In the investment grade space we saw $4.1bn priced from 5 domestic issuers across 7 tranches bringing August total volume to $66.105bn. Amazon finished investor meetings yesterday and is expected to announce a multi-tranche transaction that could total $16bn. Deals from E*Trade and VMware are also expected this week. In high yield space ClubCorp and Big River Steel are set to price today after AES Corporation and Staples priced yesterday. Aside from export/import prices, empire manufacturing, and retail sales, no major economic news is scheduled for today.

Municipal Bond Market
Munis finished mixed on Monday as traders prepare for $6.7bn of new issuance for this week. Despite treasuries being weaker, the yield on the 10yr benchmark muni GO was unchanged from 1.88%. Today we will see Mecklenburg County, N.C, sell $225 million of triple-A rated GO public improvement bonds in the competitive arena. In addition, the University of Alabama Board of Trustees will competitively sell $199.36 million of general revenue bonds in 3 separate offerings in a deal rated AA by S&P and Aa2 by Moody’s.