One of the greatest things about the bond market is early close. While our equity counterparts are slaving away until 4:00 ET today, SIFMA has recommended a pre-holiday close of 2:00 ET. There are fewer early closes than there used to be, but we still get to leave early to kick off the summer.
And the livin’ is easy…
You could barely work today in Credit even if you wanted to. Judging from the number of messages we’re getting, it feels like the street has already sneaked away to the Hamptons.
Fish are jumpin….
Supply this week reflected the anticipated exodus – there was about $20 billion in new issue, and the fish did most of their jumping on Monday and Tuesday. Concessions were a bit spotty, with some deals priced to go, and others, not so much. Secondary trading was again a mixed bag, with some weakness showing up in longer-dated bonds. The Enable Midstream deal was a case in point – this midstream gas company is a new issuer, and they brought $1.65 billion across three tranches. All looked to be well oversubscribed, but the 5 year has tightened 6 basis points in the secondary, while the 10s and 30s are a couple wider. It looked like the market was going to jump all over this deal, but ended up throwing some of the catch back.
And the cotton is high….
Spreads are still tight. Even though summer is barely upon us, it’s hard to imagine the cotton getting too much higher. Maybe investors should think about harvesting. There was very little movement in spreads overall, and excess returns month-to-date are slightly negative, driven entirely by the long end. As we doze off in the Adirondack chair, a cool beverage resting on its wide arm, it looks like credit spreads will be stable as far off into the horizon as the eye can see…
…so hush…