Wednesday, August 23, 2017

Corporate Bond Market
Good morning—Global equities are mostly lower to start the morning. In Europe, the Euro Stoxx is down 10 points, FTSE down 7.5 points, and the DAX down 32 points. Asian stocks are more mixed with the Nikkei down 30 points and the Hang Seng up 103 points. US stocks are all negative to start the session following comments by President Trump on Nafta and a potential government shutdown. Right now, the DOW is down 60 points, S&P down 8.5 points, and the NASDAQ down 19 points. The US 10yr is mostly unchanged at 2.21% after both IG and high-yield credit indexes closed tighter yesterday. Oil has dropped to $47.62 (NYM WTI crude) after a reported increase in U.S. gasoline stockpiles. Today we’re expected to see data on new home sales which is estimated at 610,000. In the IG space, there’s no domestic issuance expected today but the Development Bank of Japan and Kreditanstalt fuer Wiederaufbau are expected to price today in deals totaling $4bn.

Municipal Bond Market
Munis finished Tuesday unchanged as Texas sold $5.4bn of tax and revenue anticipation notes in the largest short-term sale of the year. With treasuries flat, the yield on the 10-year benchmark muni GO remains at 1.90%. The Issuance for this week is light with volume estimated at $4 billion. In the negotiated sector, Wells Fargo priced $256.4 million of Washington Healthcare revenue bonds for the Virginia Mason Medical Center in a deal rated Baa2 by Moody’s and BBB by S&P. The bonds came to market as 5’s to yield 2.52% 2025 and 3.51% in 2037 with a term bond in 2042 to yield 3.96% with a 4% coupon.