Thursday, August 24, 2017

Corporate Bond Market

Good Morning – Global equity markets are all negative to start this morning. Gold, the Japanese yen, and bonds are higher as tensions continue to heat up with North Korea. In Asia, we’re seeing the HANG SENG -15 points, NIKKEI -40 points, and CSI 300 +2.5 points. Right now, both Asian and European credit spreads are slightly wider.

Stock-index futures in the US are lower to start the morning with the DOW -51 points & S&P -11.25 points. The yield on the 10yr UST is down 2.5 bps to 2.237% and the 30yr is at 2.819%. Today the Treasury is set to sell $23bn of 10y notes. Corporate spreads will be opening wider by 1.1 bps as yesterday saw $19.475b price from 5 issuers across 13 tranches. High yield is also slightly wider as Cable & Wireless, Tesla, Parexel, ClubCorp, and Weekley Homes are expected to come to market this week. In Economic news, no relevant data is scheduled for today.

Municipal Bond Market

Munis finished mixed for a second straight day as traders saw the New York City Transitional Finance Authority sell $1.5 billion of fiscal 2018 future tax secured subs in 6 separate offerings. Merrill won the $411.95 million of tax-exempts with a true interest cost of 3.74%. The issue came to market as 5’s to yield 2.93% in 2040 and 4’s to yield 3.36% in 2045. RBC won the next largest tranche of $406.82 million subordinate tax-exempts with a true interest cost of 3.63%, which was priced as 5’s to yield 2.66% in 2033 and 2.86% in 2039.