Browsing articles tagged with "global macro Archives - Mischler Financial Group"
Janet Yellen Valentine’s Day Message; Healthcare M&A Break-Ups
February 2017      Debt Market Commentary   

Quigley’s Corner -Valentine’s Day With Love From Janet Yellen; No Love for Healthcare M&A

 

Investment Grade New Issue Re-Cap

Insure This! – Anthem for Cigna, like Aetna for Humana, is Dead in the Water – $91b in M&A Erased By Two Deals

IG Primary & Secondary Market Talking Points

Global Market Recap

Key Talking Points of Fed Testimony

Three Rates Hikes in 2017? .HIGHLY Improbable or “You Gotta Be Kiddin’ Me!”

Next Up – Greece, Grexit, France & Frexit

Tony’s Take on Today’s Fed Testimony

Syndicate IG Corporate-only Volume Estimates for This Week and February

The Boeing Company $300mm 30-year Deal Dashboard

Happy Valentine’s Day to All the Ladies Among My “QC” Readership

NICs, Bid-to-Covers, Tenors, Sizes and Average Spread Compression from IPTs thru Launches

New Issues Priced

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending February 8th    

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

UST Resistance/Support Table

Tomorrow’s Calendar

 

5 IG Corporate issuers priced 9 tranches between them totaling $9.90b.  The SSA space hosted a 2-part 3-year FXD/FRN from JBIC adding $2b to the mix.

The all-in IG day total was 6 issuers, 11 tranches and $11.90b.

 

The WTD IG Corporate total is now $16.60b or 78% of this week’s syndicate midpoint average calling for $21.33b.


Can’t Insure This! – Anthem for Cigna, like Aetna for Humana, is Dead in the Water – $91b in M&A Erased By Two Deals

You’ve read about the Anthem for Cigna merger in my M&A Pipeline near page bottom for months now.  Well, today, Cigna terminated its $54b merger agreement with Aetna following a federal judges rejection.  Let’s trace back the story. Anthem Inc. (Baa2/A) in July 2015, proposed to purchase Cigna Corp. (Baa1/A) for $54b or $188 per share furthering the consolidation in the healthcare sector. The deal was expected to close sometime during the second half of 2016. The merger would have involved 53mm members and would include $22b in new debt and loans. However, in light of a federal judge’s ruling on Monday, January 23rd that another proposed insurance merger – the $37b deal between Aetna and Humana should not be allowed to consummate due to antitrust issues it remained to be seen if the Anthem/Cigna merger would meet the same fate especially given the former deal size involved $17bn more the former. That two rejected deals have taken $91b out of the M&A pipeline. 

IG Primary & Secondary Market Talking Points

 

  • The average spread from IPTs thru the launch/final pricing of today’s 9 IG Corporate-only new issues was <15.78> bps.
  • BAML’s IG Master Index tightened 2 bps to +126 vs. +128.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS tightened 1 bp to 1.20 vs. +121.  The “LUACOAS” wide since 2012 is +215.  +120 is the new tight.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +167.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $16.7b on Monday versus $18.2b on Friday and $15.5b the previous Monday.
  • The 10-DMA stands at $20.2b.

 

Global Market Recap

 

  • Fed Chair Yellen: Hawkish but the markets are not so sure she is that hawkish.
  • U.S Treasuries – Closed in the red on Yellen but closed well off the session low prices.
  • Overseas Bonds – JGB’s mixed & steeper. Europe followed Treasuries down.
  • Stocks – Even a hawkish Yellen cannot keep U.S. stocks down (record highs again).
  • Overseas Stocks – Japan had a poor day. China unchanged. Europe at a 1 year high.
  • Economic – U.S. PPI data m/m was higher but the y/y data was not.
  • Overseas Economic – China inflation higher. Japan IP solid. EU data disappointing.
  • Currencies – USD rallied on the Yellen testimony. DXY Index back over 101.
  • Commodities – Crude oil small gain, gold unchanged, silver better & cooper red.
  • CDX IG: -0.12 to 63.15
  • CDX HY: -0.48 to 317.89
  • CDX EM: -3.18 to 208.93

CDX levels are as of 3:30PM ET today.

-Tony Farren


Key Talking Points of Fed Testimony

Federal Reserve Chair Janet Yellen testified before the Senate today delivering her Semiannual Monetary Policy Report to Congress.  The big headline statement is when Yellen  said the Committee would like a balance sheet that is substantially smaller and only comprised of Treasuries.  It was the Chair’s most hawkish comment of the day.

Here are the key takeaways:

  • Fed Chair Yellen: Will evaluate progress at “upcoming meetings.”
  • “Too early to know” fiscal policy and its effects on outlook.
  • Fiscal policy should focus on improving long term economic growth.
  • Business sentiment has “noticeably improved” in the past few months.
  • U.S. monetary policy “remains accommodative.”
  • Expects the economy to continue to expand at a moderate pace.
  • Fiscal changes should put accounts on a sustainable trajectory.
  • FOMC expects neutral Fed Funds Rate to rise somewhat over time.
  • Pace of global economic activity should pick up over time.
  • Waiting too long could disrupt financial markets and result in recession.
  • Waiting too long to remove accommodation is “unwise.”
  • Fiscal policy change could affect the economy and is only one factor.
  • Further hikes are appropriate if employment and inflation evolve w/expectations.
  • Yellen repeats that waiting too long to tighten “would be unwise.”
  • Further adjustments are likely needed if the economy is on track.
  • Fed to adjust rate path views as outlook evolves.
  • Says changes in fiscal policy could affect outlook.
  • Too early to know what policies will be put in place.
  • Stresses importance of policies that lift productivity.
  • Rate decisions to be aimed at meeting the Fed’s twin goals.
  • Keeping the Fed balance sheet large supports accommodation.
  • Economy has continued to make progress toward the Fed’s goals.
  • Reassuring market-based inflation compensation has risen.
  • FOMC reaffirms long-run symmetrical inflation goal of 2%.

 

  • Wages have picked up, labor market improvement widespread.
  • Says jobless rate is in line with long-run normal estimates.
  • Business sentiment has improved in the past few months.
  • Recent rise in mortgage rates may restrain housing somewhat.
  • FOMC’s longer run goal is to shrink its balance sheet.
  • We hope asset purchases were unusual intervention.
  • Would anticipate the balance sheet eventually being much smaller.
  • Fed doesn’t want to use its balance sheet as an active policy tool.
  • The FOMC wants to rely on rate changes for policy.
  • Stopping reinvestment to happen in a gradual and orderly way.
  • Wants to wait until normalization is well under way.
  • The FOMC will discuss balance sheet strategy in the coming months.


Three Rates Hikes in 2017? .HIGHLY Improbable

Now let’s first sit back a second and re-evaluate the thought of three rate hikes in 2017.  In each of the last two years the lone annual rate hike came in December.  The chances of a rate hike in March increased from 12% to a resounding 18%. In other words “big deal!”  There is no rate hike coming in March.  Next, next look at Western Civilization.  There are critical elections in the EU with Holland up first on March 15th.  Geert Wilders is ahead in that election. He represents the far-right Party for Freedom or the “PVV”.  He is expected to gain the most seats in that general election.  Among his notable campaign promises – for which there is significant support – is to leave the Euro and the EU as well as close down all the mosques in Holland.  Okay!  You see where this is going?
Next up, France. Marine Le Pen, head of the National Front is ahead of her rival Francois Fillon, the latter bogged down by Penelope-gate, by 2-3%.  As each day goes by Le Pen is getting stronger and stronger as her message resonates with and reflects that of “true” France.  The second round or “run-off” election in May shows Le Pen behind but dramatically closing the gap. She is now trailing 58% to 42% and gaining each day. Just over a week ago the numbers were 73% to 37%. Remember the Trump election.  A voice in France WILL BE HEARD!  Among Le Pen’s promises is to also leave the EU and take back France’s wonderful but rapidly dying culture.

German elections then follow in September with Angela Merkel losing ground to Socialist Party leader and secondary school drop-out Martin Schulz. Polls currently show Merkel barely ahead 33% to 32%.  Germany’s far-right Alternative for Deutschland Party (AfD) is set to win its first parliamentary seats and thus far has captured 10% of the Hinterland’s support……interesting to say the least!

By the time this all plays out Yellen will be into late September not counting adjustment periods and shocks to the system. Oh yes, I haven’t even begun to discuss Greece so, while I’m on that topic let’s do it –

Next Up – GreeceA Global Macro View

Greece never ever went away. Greece was simply outperformed in the media by BREXIT, the U.S. Presidential election, the new Administration and the aforementioned EU elections. Let’s take a look at some of the major problems confronting the Hellenic Republic shall we? Thanks to friend and former colleague Dr. Scott MacDonald, Chief Economist for Smith’s Research and Gradings for his meaningful discourses and today’s piece titled, “Can the EU Stop Yet Another Greek Debt Crisis?” Thanks Doc!

 

  • Greece needs creditors to release a €10.3b tranche from its 2015 bail out agreement to fulfill its debt obligations and avoid default.
  • Given the aforementioned issues playing out in the EU (BREXIT, the various elections, immigrations, sweeping nationalism/populism), Greece is once again the potential linchpin for the future EU.
  • The Greek economy has contracted by 26% since 2009.
  • Unemployment hovers at 20%.
  • Inefficient bureaucracy
  • Massive debt, prevalent tax evasion
  • All this despite three prior bail outs and stringent austerity measures.
  • According to the OECD, Greece’s gross debt-to-GDP-ratio stands at 185.7% of GDP. Only Japan has a worse ration of 240%.
  • Greece posted anemic 0.4% real GDP growth in 2014 after which the country slipped back into recession in 2015 and was flat last year.
  • Concerns of the full impact of BREXIT on the EU and Greece in particular.
  • Risk of another wave of migrants for which Greece serves as a major transit point.
  • Risk from weaker global trade.
  • Germany’s Finance Minister Wolfgang Schauble ruled out debt reduction for Greece with this statement last week, “for that, Greece would have to leave the monetary union.”
  • The Euro Zone’s rescue funds, EFSF and ESM already disbursed €174b to Greece, with more needed! The ESM’s head Klaus Regling said, “we would not have lent this amount if we did not think we would get our money back.”  Tip of the day: If Regling ever returns to the private sector to head a company one day, please remember to never buy its stock = Investing 101.

In conclusion before BREXIT et al, Greece was always threatened with being kicked out of the EU.  Post-BREXIT and in the midst of a much more complicated developing geopolitical landscape, Greece might see the royal boot as a wonderful invitation!

 

Tony’s Take on Today’s Fed Testimony

The Fed and I clearly are not seeing the U.S. and the world in the same light. The Fed owns roughly $414 bln in Treasuries maturing in 2018. Where does the Fed think the Treasury will be able to come up with $414 bln to pay the Fed for their 2018 holdings?  Treasury would have to jack up issuance to pay the Fed back. Raising rates 75 bps per year, shrinking the Fed balance sheet and a sizable increase in UST issuance would be a disaster for Treasury yields and the U.S. economy. Tony Farren

 

Syndicate IG Corporate-only Volume Estimates for This Week and February

 

IG Corporate New Issuance This Week
2/13-2/17
vs. Current
WTD – $16.60b
February 2017
Forecasts
vs. Current
MTD – $43.575b
Low-End Avg. $20.71b 80.15% $90.65b 48.07%
Midpoint Avg. $21.33b 77.82% $91.96b 47.38%
High-End Avg. $21.96b 75.59% $93.26b 46.72%
The Low $15b 110.67% $85b 51.26%
The High $26b 63.85% $120b 36.31%

 

The Boeing Company (NYSE:BA) $300mm 30-year Deal Dashboard

 

The Boeing Company today issued a $900mm 3-part 5-, 10- and 30-year transaction.  If I’m writing about that means Mischler was involved.  Today, the nation’s oldest Service Disabled Veteran broker dealer was were invited to serve as an active 0.50% Co-Manager on the longer 30-year tranche.

The direct comparable for today’s new 30-year tranche was the outstanding BA 3.375% due 6/15/2046 that was T+87 pre-announcement nailing NIC as negative <2> bps on today’s new print that priced at T+85.
Here’s a look at today’s Deal Dashboard for The Boeing Company’s $900mm 3-part new issue:

 

BA Issue IPTs GUIDANCE LAUNCH PRICED Spread
Compression
NICs
(bps)
Trading at
the Break
+/-
(bps)
5yr +60a +45a (+/-3) +42 +42 <18> bps <1> 41.5/ <0.5>
10yr +80a +65a (+/-5) +60 +60 <20> bps <2> 59.5. <0.5>
30yr +100-105 +90a (+/-5) +85 +85 <17.5> bps <2> 85/ 0/flat

 

………and here’s a look at today’s re-opening final book sizes and oversubscription rates.

 

BA  Issue – Tranche
Size
Final Book
Size
Bid-to-Cover
Rate
5yr 300 $1.3b 4.33x
10yr 300 $1.55b 5.17x
30yr 300 $2b 6.67x

 

Boeing Company A2/A 2.125% 3/01/2022 300 +60a +45a (+/-3) +42 +42 CITI/DB/SMBC
Boeing Company A2/A 2.80% 3/01/2027 300 +80a +65a (+/-5) +60 +60 CITI/GS/MIZ
Boeing Company A2/A 3.65% 3/01/2047 300 +100-105 +90a (+/-5) +85 +85 CITI/JPM/WFS

 

Final Pricing – Boeing.
BA $300mm 2.125% due 3/01/2022 @ $98.790 to yield 2.381% or T+42  MW+10

BA $300mm 2.80% due 3/01/2027 @ $97.698 to yield 3.068% or T+60  MW+10

BA $300mm 3.65% due 3/01/2047 @ $95.392 to yield 3.912% or T+85  MW+15

 

Happy Valentine’s Day to All the Ladies Among My “QC” Readership

 

To wrap things up, this lovable guy-in-the-corner sends out a Happy Valentine’s Day wish to all the wonderful women among his “QC” distribution list, especially all the great leading ladies from fixed income syndicate land and those in Treasury/Funding from among the many issuers in his DCM universe. I wish you all a spectacular evening.

Remember guys – behind every successful man is a truly awesome woman! That’s just the way it is!

 

Below please find my synopsis of everything Syndicate and Secondary from today’s debt capital markets, including the investment grade corporate bond data drill down as seen from my seat here in Syndicate, Sales and DCM.

 

Have a great evening!

Ron Quigley

 

NICs, Bid-to-Covers, Tenors, Sizes and Average Spread Compression from IPTs thru Launches

 

Here’s a review of this week’s five key primary market driver averages for IG Corporates only through Monday’s session followed by the averages over the prior six weeks:

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
2/13
AVERAGES
WEEK 2/06
AVERAGES
WEEK 1/30
AVERAGES
WEEK 1/23
AVERAGES
WEEK 1/16
AVERAGES
WEEK 1/09
AVERAGES
WEEK 1/02
New Issue Concessions 0.62 bps <3.44> bps <0.87> bps 1.13b bps 3.42 bps 0.85 bps 2.25 bps
Oversubscription Rates 3.62x 3.92x 3.12x 3.29x 2.40x 2.85x 2.45x
Tenors 5.82 yrs 12.04 yrs 11.60 yrs 6.67 yrs 12 yrs 7.83 yrs 6.52 yrs
Tranche Sizes $609mm $735mm $1,311 yrs $845mm $1,123mm $927mm $859mm
Avg. Spd. Compression
IPTs to Launch
<16.86> bps <19.60> bps <19.77> bps <18.20> bps <14.69> bps <18.77> bps <15.27> bps

 

New Issues Priced

Today’s recap of visitors to our IG dollar Corporate and SSA DCM:

For ratings I use the better two of Moody’s, S&P or Fitch.

 

IG          

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
Boeing Company A2/A 2.125% 3/01/2022 300 +60a +45a (+/-3) +42 +42 CITI/DB/SMBC
Boeing Company A2/A 2.80% 3/01/2027 300 +80a +65a (+/-5) +60 +60 CITI/GS/MIZ
Boeing Company A2/A 3.65% 3/01/2047 300 +100-105 +90a (+/-5) +85 +85 CITI/JPM/WFS
J.P. Morgan Chase & Co. A3/A- 4.26% 2/22/2048 2,000 +130a +120-123 +120 +120 JPM-sole
Morgan Stanley A3/A FRN 2/14/2020 3,000 3mL+95a 3mL+80 the # 3mL+80 3mL+80 MS-sole
Novartis Capital Corp. Aa3/AA- 1.80% 2/14/2020 1,000 +50-55 +40-45 +40 +40 BAML/CITI/JPM
Novartis Capital Corp. Aa3/AA- 2.40% 5/17/2022 1,000 +65-70 +55-60 +55 +55 BAML/CITI/JPM
Novartis Capital Corp. Aa3/AA- 3.10% 5/17/2027 1,000 +90-95 +75a (+/-2) +73 +73 BAML/CITI/JPM
PNC Bank NA A2/A+ 2.625% 2/17/2022 1,000 +85a +70a (+/-2) +68 +68 CITI/GS/JPM/PNC

 

SSA

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
JBIC A1/A+ FRN 2/24/2020 500 3mL+equiv 3mL+equiv 3mL+57 3mL+57 BARC/CITI/DAIW/JPM
JBIC A1/A+ 2.25% 2/24/2020 1,500 MS +60a MS +58a MS +57 +80.7 BARC/CITI/DAIW/JPM

 

Indexes and New Issue Volume
*Denotes new tight or new record high.

 

Index Open Current Change  
IG27 63.268 *62.80 <0.468>
HV27 136.89 134.645 <2.245>
VIX 11.08 10.74 <0.34>  
S&P 2,328 *2,337 9
DOW 20,412 *20,504 92  
 

USD

 

IG Corporates

 

USD

 

Total (IG + SSA)

DAY: $9.90 bn DAY: $11.90 bn
WTD: $16.60 bn WTD: $18.60 bn
MTD: $43.575 bn MTD: $55.825 bn
YTD: $215.958 bn YTD: $283.108 bn

 

Lipper Report/Fund Flows – Week ending February 8th    

     

  • For the week ended February 8th, Lipper U.S. Fund Flows reported an inflow of $4.932b into Corporate Investment Grade Funds (2016 YTD net inflow of $17.286b) and a net inflow of $441.718m into High Yield Funds (2016 YTD net inflow of $732.780m).
  • Over the same period, Lipper reported a net inflow of $854.782m into Loan Participation Funds (2016 YTD net inflow of $4.614b).
  • Emerging Market debt funds reported a net inflow of $358.189m (2016 YTD inflow of $502.693m).

IG Credit Spreads by Rating (more…)

Debt Market Driver: Ford Goes Further; EU is Fractured-Mischler Global Macro Lens
December 2016      Debt Market Commentary   

Quigley’s Corner 12.05.16 – Ford Goes Further; Italexit, Global Macro Comment


Investment Grade Corporate Debt New Issue Re-Cap 

Global Market Recap

IG Primary & Secondary Market Talking Points

Syndicate IG Corporate-only Volume Estimates for This Week and December

Ford Motor Co. (NYSE:F) : 2-part $2.8b 10s/30s Deal Dashboard

Diversity & Inclusion Going Further with Ford; A Veteran’s Vehicle Company

Global Macro Commentary: Italexit, Austria and The Fractured European Union

NICs, Bid-to-Covers, Tenors, Sizes and Average Spread Compression from IPTs thru Launches

New Issues Priced

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending November 30th    

Investment Grade Credit Spreads (by Rating & Industry)

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar     

 

 

7 IG Corporate issuers tapped our IG dollar DCM pricing a total of 11 tranches between them totaling $6.325b.  SSA was shut out today.  Our December MTD total now stands at $21.255b or over 51% of the syndicate midpoint average forecast of $41.52b.

The Deal-of-the-Day always belongs to those that Mischler is involved in and today’s highlighted new issue belongs to Ford Motor Company.  First let’s check in with Tony for our Global Market Recap, Primary and Secondary market talking points, the WTD and MTD volume tables and then we’ll all “Go Further” reading about today’s $2.8bn two-part 10s/30s new issue that was……… “Built Ford Tough!”

 

Global Market Recap

 

  • U.S. Treasuries – closed mixed & little changed (JGB’s also). EU bonds hit hard.
  • 3mth Libor – Set at the highest yield since May 2009 (0.94806%).
  • Stocks – NASDAQ leads U.S. stocks higher & the Dow traded at its all-time high.
  • Overseas Stocks – Rally in Europe. Sell off in Europe.
  • Economic – ISM non-manufacturing was the strongest since October 2015.
  • Overseas Economic – Full calendars in Japan & Europe with more good than bad.
  • Currencies – USD beaten up by Euro, basically unchanged vs. Pound & better vs. Yen.
  • Commodities – Crude oil red, CRB higher & big gains for natural gas & copper.
  • CDX IG: -0.79 to 72.14
  • CDX HY: -5.62 to 383.38
  • CDX EM: -5.48 to 264.82

*CDX levels are as of 3:30PM ET today.

-Tony Farren

 

IG Primary & Secondary Market Talking Points

 

  • KeyCorp upsized today’s $25 par PerpNC10, Series “E” FXD/FRN to $500mm from $250mm.
  • National Retail Properties Inc. increased its 10-year Senior Notes new issue to $350mm from $300mm at the launch and at the tightest side of guidance.
  • Southern Company boosted its 40NC5 $1000 par FXD/FRN Junior Subordinated Notes new issue today to $550mm from $400mm at the launch and at the tightest side of guidance.
  • The average spread compression from IPTs thru the launch/final pricing of today’s 11 IG Corporate-only new issues, including today’s KeyCorp Pfd., was <19.43> bps.
    Not counting the preferred, spread compression across the 10 IG Corporate new issues was <21.125> bps.
  • BAML’s IG Master Index was unchanged at +135.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS widened 1 bp to +129 vs. +128.  The “LUACOAS” wide since 2012 is +215. The tight is +135.
  • Standard & Poor’s Investment Grade Composite Spread widened 1 bp to +176 vs. +175.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $25.0b on Friday versus $23.3b on Thursday and $1.6b the previous Friday.

 

Syndicate IG Corporate-only Volume Estimates for This Week and December  

 

IG Corporate New Issuance This Week
12/05-12/09
vs. Current
WTD – $6.325b
December 2016
Forecasts
vs. Current
MTD – $21.255b
Low-End Avg. $16.78b 37.69% $40.87b 52.01%
Midpoint Avg. $17.87b 35.39% $41.52b 51.19%
High-End Avg. $18.96b 33.36% $42.17b 50.40%
The Low $10b 63.25% $30b 70.85%
The High $25b 25.3% $60b 35.42%

Ford Motor Company two-part $2.8b 10s/30s Deal Dashboard

 

The Ford comps used for today’s 10-year relative value study was the outstanding Ford Motor Credit Co. LLC 4.389% due 1/08/2026 that was G+190 pre-announcement pegging NIC on the new 10-year that priced at T+195 as 5 bps.

 

For 30-year fair value, I looked to the Ford Motor Company 4.75% due 1/15/2043 that was T+213 nailing concession on today’s new 30-year tranche that final priced at T+220 as 7 bps.

 

Ford Issue IPTs GUIDANCE LAUNCH PRICED Spread
Compression
NICs
(bps)
Trading at
the Break
+/-
(bps)
10yr FXD +215a +200a (+/-5) +195 +195 <20> bps +5 192/190 <3>
30yr FXD +240a +225a (+/-5) +220 +220 <20> bps +7 220/218 0/flat

 

………and here’s a look at the final book sizes and oversubscription rates:

 

Ford  Issue Tranche Size Final Book
Size
Bid-to-Cover
Rate
10yr FXD $1.5bn $5.2bn 3.47x
30yr FXD $1.3bn $3.7bn 2.85x

 

Final Pricing – Ford Motor Company
F $1,500mm 4.346% due 12/08/2026 @ $100.00 to yield 4.346% or T+195

F $1,300mm 5.291% due 12/08/2046 @ $100.00 to yield 5.291% or T+220

 

ford-debt-issuance-mischler-diversity-inclusion

Diversity & Inclusion Going Further with Ford Motor Company

 

William Clay Ford put it best when he said, “Change is upon us. We are reinventing this company in ways that will make it incredibly relevant for the next 50 years.”  Ford’s leadership from William Clay Ford and Mark Fields permeates the entire organization from the inner chambers of its leadership structure directly into the offices of  Treasury/Funding and Global Capital Markets team.
Not only is Ford Motor Company committed to strategic shifts to expand into an auto and mobility company, it has always been all-in when it comes to diversity and inclusion.  Mischler Financial’s certification as the nation’s oldest Service Disabled Veteran broker dealer, is proud to highlight Ford’s myriad achievements as the only automaker named to the World’s Most Ethical Company list by Ethisphere Institute.  That’s a recognition that Ford has been honored with for seven consecutive years!  Ford embraces diversity and inclusion which is central to its Company and its over 199,000 global employees.  Ford understands that backgrounds, opinions, experiences and perspectives of a diverse workforce make it a much stronger business while fostering a collaborative work environment.  Those very people drive Ford’s innovations. In terms of full year 2015, Ford’s work force included 26% women in middle management jobs or above in which 18% were managers.  29% of Ford’s U.S. hourly and salaried workforce were members of minority groups and 22% were female.  2 of Ford’s 15-member Board of Directors are women and 2 are minorities.  Of its 44 Corporate Officers, 6 are women and 8 are minorities.

 

Ford and Veteran Causes

In terms of its commitment to our nation’s veterans, Ford expanded mobility options for disabled Military veterans with vehicle donations across the U.S. They’ve added 8 more vehicles to the DAV Transportation Network, making a total of 207 vehicles contributed to the DAV fleet over the past 20 years. Ford continues to invest in DAV scholarships and Winter Sports Clinic helping veterans and their families transition to new careers and Ford and the DAV have enjoyed a 94-year relationship that dates back to the time Henry Ford provided Model T Fords as transportation to our DAV members making it one of, if not, the longest running D&I mandate in our nation.  Ford vehicles assisted 716,000 military veterans reach their medical appointments in 2015.  Ford also awarded $1.2 million in scholarships to young men and women who generously volunteer their time to help disabled veterans in their communities.   Ford’s corporate cultural and internal D&I mandate was long ago embraced by Henry Ford himself so, it’s in their corporate DNA. Beginning in 1919 the Founder and Chairman himself mandated the hiring of disabled veterans returning home from World War I.  Today Ford employs more than 6,000 veterans and hundreds of active military personnel, reservists and guardsmen.

Ford has the hardware to back up the great things that management oversees internally for D&I:

  • Best Companies for Diversity – Black Enterprise
  • Best of the Best: Top Diversity Employer –Hispanic Network
  • Employer of the Year – CAREERS & the disAbled Magazine
  • Top Diversity Employer – Professional Woman’s Magazine
  • Top 50 Employers  – Minority Engineer
  • America’s Top 50 Organizations for Multicultural Business Opportunities – DiversityBusiness Magazine.

Global Macro: Italexit; Austria and Sweeping Populism

The dollar initially rose to a 20-month high against the Euro before reversing back to close at 1.076 as Italian’s voted “NO” in the eagerly anticipated referendum vote that would have changed Italy’s constitution making it easier for Prime Minister Matteo Renzi to institute change in a country now on its 65th government in 71 years post-World War II.  You heard that call voiced aggressively here in the “QC” a while ago! More importantly it speaks to the surge of populism sweeping both the EU and the U.S. following BREXIT and Donald Trump’s Presidential victory. The “NO” vote and Renzi’s promise to resign as a result, means likely early elections next year in Italy that could very well see the emergence of the 5-Star Movement ascending to power. That party headed by Italian comedian, actor, blogger and political activist Beppe Grippo, was extremely vocal in support of a “NO” vote.  The people listened and populism is spreading.  The 5-Star Movement is equally as powerful as Renzi’s Democratic Party but the former is vehemently opposed to EU membership. Renzi attempted to speed up the slow bureaucracy that is known as “Italian politics.” The current complex governing system was installed to prevent another Mussolini from rising through the ranks. The problem is it prevents deep divides in Italian government which there always are, and as a result, they’ve had 65 post WWII governments.  5-Star’s leader Beppe Grillo wants a referendum vote just like the BREXIT vote.  So the forces are now in motion to make that possibility becoming a reality.  The 60% vs. 40% crushing outcome tells us all we need to know about how serious to take the news.

italexit-mischler-global-macro

As for Italian banks, retail customers hold a quarter of a trillion Euro in Italian bank debt – listen up – that’s the highest share of household wealth invested in the developed world according to Consob, the public authority responsible for regulating the Italian financial markets.  With 17% of total bank debt deemed “bad” in a nation pressured by debt equal to 133% of GDP,  well, the picture is pretty frightening folks.  All this in our inextricably-linked global economy.

In a geopolitical call that was also a close – but one that I got wrong in projecting, as well as being equally important news, Austria’s Nationalist candidate Norbert Hofer conceded defeat to rival and center-left candidate Alexander Van der Bellen by a 53.34% to 46.7% margin in a re-run of the contested May election in which Van der Bellen won by just over 0.5%.  Hofer’s party contested those results that were rescheduled for yesterday.  Hofer would have been the first Nationalist head of state in Europe post World War II. More telling is that Austria’s Nationalist Freedom party was founded in 1956 by Anton Reinthaller – a name that probably means nothing to you, but you should know that he was a Nazi and an SS officer during WWII.  It’s amazing what re-branding can do for a political party over decades, but a fact is a fact and so it’s included here. Europe’s political, cultural and economic situation is analogous to  a highly active volcano.  It is fluid, it is changing and re-shaping itself before our very eyes.

Austria is also a nation virtually divided between political sympathies.  Despite Hofer’s relatively narrow defeat, what is much more telling and not much different in outcome is that for the first time in its 40 years in existence a Green Party candidate has won a presidential election in Europe.  It’s also the first time a new Party will run Austria outside of its two reigning political monopolies the Social Democrats and People’s Party. According to the World Economic forum’s European 2020 Competitiveness Report, Austria is Europe’s 6th ranked most competitive economy. The top five are Finland, Sweden, Holland, Denmark and Germany.  There is no coincidence that five of those Nordic nations included on the list have swung far right with a strong trend toward nationalist party growth. Remember my call for an eventual Northern and Southern Euro currency split between north and south?  Those 6 economies would all be part of the northern Euro. It’s one future way that the EU and its single currency can dismantle with some modicum of order.

Rural Austrian voters appear to have voted more against Hofer’s far right Nationalist Freedom Party than for Van der Bellen’s Green Party.  Europe knows best about that but it’s not a vote of confidence for the center left government.

What this all amounts to is that Europe is continuing toward dismantle mode.  Italy now has a series of events coming up simultaneous with its banking crisis to resolve or unwind.  The latter is likely with no logical outcome other than portending B-A-D things for it and Europe.  Sorry to be so jolly this holiday time of year but I’m not going to sit back and tell you anything other than how it is.  Italy’s GDP has not grown at all in a decade while its youth unemployment rate hovers at just above 40%.  Yes that’s correct F-O-R-T-Y percent.

40% unemployment is unfathomable for the world’s third largest debtor nation.  Digest that for a moment.  Here’s another shocking statistic – Italians own more second homes per capita than any other nation on the planet.  Didn’t know that eh?  No worries you’re not supposed to.  The reason – family.  That’s historically foundational to Italian culture.  No one can sell a home in Italy today.  When the financial crisis plays out in Italy, real estate will get lambasted much more painfully than it did here in the throes of our financial crisis.  Infrastructure is also a problem.  What Italian youth is doing is taking full advantage of the Schengen agreement in the EU by finding work in other neighboring European countries.  When that happens, nationals resent it during tough times.  Are you following this?  it is not the Unites States of Europe.  It is Europe – a continent with way too many histories, cultures, languages and cuisines.  The fact that Hofer came so close to a Nationalist government that is gaining huge momentum in France and Holland is telling.  Pay attention to this because it’s not going away. Hofer wanted to develop strong ties to Trump’s incoming Administration and grow closer to its historically strong ties with Eastern Europe and Russia. The EU Presidency is handed over to Austria in 2018 which will carry significance on a wider scale.

One thing is for sure, nations will be watching out for themselves more than ever before.  It doesn’t take a leap of faith for European investors fly like heck into the safety of U.S. IG Corporate credits even after factoring in exchange rates. So we’ll have a rate hike in December after which it will be lower-for-longer again. Rates will come down as the world’s money comes flying in.

Political instability is alive and well in the EU.  Italy is in turmoil and the Euro Zone is headed toward the next chapter in its ever deepening crisis.  The U.S. is weathering the storm just fine thank you very much.  Good things are coming to our economy and nation.  The bigger question is how long will all this last?

Below please find my synopsis of everything Syndicate and Secondary from today’s debt capital markets, including the investment grade corporate bond data drill down as seen from my seat here in Syndicate, Sales and DCM.

 

Have a great evening!
Ron Quigley, Managing Director and Head of Fixed Income Syndicate

 

NICs, Bid-to-Covers, Tenors, Sizes and Average Spread Compression from IPTs thru Launches

 

…..and here’s another look at last week’s day-by-day re-cap of key primary market driver averages for IG Corporates only followed by the prior four week’s averages:

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
11/28
TUES.
11/29
WED.
11/30
TH.
12/01
FRI.
12/02
THIS WEEK’S
AVERAGES
AVERAGES
WEEK 11/21
AVERAGES
WEEK 11/14
AVERAGES
WEEK 11/07
New Issue Concessions 0.20 bps 1.11 bps 12.50 bps 3.75 bps N/A 3.53 bps 4.5 bps 3.62 bps <3.60> bps
Oversubscription Rates 3.12x 3.43x 7.45x 2.49x 7.80x 3.38x 2.99x 2.78x 4.26x
Tenors 10. 99 yrs 13.50 yrs 10.50 yrs 8.78 yrs 8.5 yrs 10.84 yrs 12.14 yrs 11.28 yrs 13.31 yrs
Tranche Sizes $538mm $512mm $525mm $1,064mm $500mm $711mm $929mm $1,039mm $692mm
Avg. Spd. Compression
IPTs to Launch
<14.71> yrs <14.79> yrs <33.125> bps <14.83> bps <37.50> bps <17.60> bps <16.07> bps <17.69> bps <22.96> bps

 

New Issues Priced

(more…)

Recession Rattling; Industry Experts Opine-Mischler Commentary
February 2016      Debt Market Commentary   

Quigley’s Corner 02.11.16 – Industry Experts On Recession Talk: Déjà vu All Over Again

  • The IG Re-Cap
  • Special Edition of the Best & Brightest
  • Takin’ It to the Street-Soundbites from Most Influential Accounts and Strategists
  • An Illustrated “Market Circle of Death”
  • Tale of the Tapes
  • Today’s 5-Section Global Market Recap
  • Urgent Bulletin to all Treasurers, Bankers, Accounts and Syndicate managers.
  • “On Black Holes, Politicians and Central Banks”
  • Everything Syndicate and Secondary from the day’s debt capital markets

 

Investment Grade New Issue Re-Cap – Apocalypse N-O-W ?

That’ll get your attention.  Here’s why – I walked in this morning and turned on the TV to Bloomberg News. Someone was being interviewed and the caption in large font at the bottom of the screen read, “Money out of global markets and into pockets.”  I knew immediately this was a “risk off” day.  I then turned on my systems and saw the extent of the carnage.  There was no IG Corporate issuance today.  We’ve now had “7” no-print non-Friday sessions YTD. That puts us on pace for 61 total non-Friday no-print days for 2016. SSA issuer Rentenbank priced its new 5-year FRN and upsized it to $750mm to $500m. That was all she wrote today.  I immediately started calling global money managers, domestic and overseas accounts, strategists and personal market contacts to get their take on things.  Here are sound bites from some of those conversations. They are very revealing and frighteningly similar.

“The Best and the Brightest” – A Must Read Special Edition

Given recent global market tumult, especially this week and today, it was obvious to me that asking anyone for next week’s forecast of IG Corporate supply would seem foolish as no one has any idea in here.  It speaks to how volatile and uncertain our markets are.  Asking that question of the Best & Brightest in tomorrow’s Friday edition ahead of a long three-day President’s Day weekend would be unfair. So, instead I asked three questions pertinent and critical to our credit markets.  The responses were very thoughtful and the meaningful responses took the Best and Brightest respondents time and reflection.  If you are in the credit markets; if you are a Treasury/Funding operative; if you are a tier I, II or III account, a banker, a salesman, a trader or an executive in this business this is a MUST read.

3 questions posed to the “Best and the Brightest” today:

“Good afternoon! I decided to withhold my usual Friday IG Corporate new issue volume forecast poll.  I simply ask that you reply to any one or each of the following questions, as your time allows.  I will print responses instead in lieu of forecasts.  I am always trying to find new ways to make the “QC” more meaningful to its readership. These questions are on many market participant’s minds including Issuers’ Treasury/Funding teams, other members of the Best & Brightest crew, Accounts and Strategists. Here are the questions:

  1. “When do you think markets unfreeze and we get back to new issue activity again, albeit at wider levels?”
  2. “What do you think it takes for the current cycle to break, and for us to find a firmer footing?”
  3. “This week the NY Fed released a research piece saying they felt there is sufficient liquidity in the U.S. credit markets. Is that true in your opinion?”

……and here are their responses: (more…)

High Yield Debt Issuance Rules The Day-Mischler
February 2016      Debt Market Commentary   

Quigley’s Corner 02.04.16- High Yield Bond Issuance: Biggest Daily Volume in 3 Months

 

Investment Grade Corporate Debt New Issue Re-Cap –Praxair is Lone IG Corporate Issuer

Global Macro- Turkish-Syrian War Means War on the Doorstep for the EU

IG Primary Market Talking Points

New Issues Priced

Lipper Report/Fund Flows

IG Secondary Market Trade Lab

Rates Trading Lab

New Issue Pipeline

M&A Pipeline

Investment Grade Credit Spreads (by Industry/Rating)

 

The IG dollar primary markets suffered from further global market volatility with Praxair, the largest industrial gases company in North and South America the lone, issuer to price a deal.  The tally was meager with I deal totaling $250mm.  3 SSA prints contributed another $1.5b between them bringing the all0-in day total to 4 issuers, 4 tranches and $1.75b.  We have senior seasoned professionals here in our Mischler Stamford office, each with over 25 years of experience or more.  All say the same thing and mirror what you’re probably hearing as well – “I have never seen markets like this……EVER!” Another said, “2008 was pretty bad but this market is right there.” Still a third quipped, “I have never seen a market with more people having less conviction than now.  People just don’t know what to do.” Those are comments from a senior rates trader, a guy who spent most of his life covering Central Banks and a Structured Products wiz.  I spoke with a reporter this morning who wrote, “What can I say? I walk in with stocks +70 and 90 minutes later they’re down 50.  I thought we’d have a solid day of issuance but now, I’m not sure of anything.”

Of course, we are sure of one thing, the world is a confused mess.  This morning BOE Governor Mark Carney announced that the U.K.’s Monetary Policy Committee voted unanimously to hold rates at 0.50% citing an “unforgiving global environment and sustained financial market turbulence.” The BOE Governor cut forecasts yet again saying inflation will average 0.8% in 2016 crawling to 2.00% sometime in 2018.

After the BOE announcement, I spoke at length about our current market environment with a very reputable European account that I cover.  This person has been in the markets for over 30 years. Here’s what he shared – “I haven’t experienced markets like this and I’ve been in the business since 1981.  The biggest issues are that there are no longer buyers of last resort, cost of capital at banks is prohibitive, risk and compliance run today’s firms and regulators have made it impossible for anyone to make money.  There aren’t many prop desks around anymore either.  Bottom line is today’s markets have no stops; no one to say this has gone too far.”

 

Turkish-Syrian War Means War on the Doorstep for the EU

 

Days like these also pull other global event risks into focus. For example, in today’s early session Russia’s Defense Ministry spokesman Igor Konashenkov said, “We have reason to believe that Turkey is actively preparing for a military invasion of a sovereign state – the Syrian Arab Republic.  We’re detecting more and more signs of Turkish armed forces being engaged in covert preparations for direct military actions in Syria.”  Now THAT is something Europe does not want.  There is a reason why Turkey never gained EU membership.  Politicos can say what they will but Europeans do not want Turkey in the EU, which is already showing signs of coming undone. The EU in and of itself is a clash of different cultures, languages and histories let alone welcoming the gateway to Islam.  I know that may sound harsh at first read but it is true.  Turkey is the gateway to Islam; the bridge connecting Asia with Europe; the doorway through which a lot of trouble can manifest itself.  Simply put, the headline for a war between Turkey and Syria would read, “EU – War on the Doorstep.”  Of course this is all tempered by the fact that the Russian Defense Ministry is yet just another mouthpiece for former FSB agent Vlad-the-Terrible Putin.  Still, it’s more bad news the world doesn’t need.

 

Recap

 

USTs – Treasuries closed with small gains heading into the Employment Report.

Stocks – U.S. higher, Europe mixed, Nikkei red and China & Hang Seng rallied.

Economic – U.S. data continues to disappoint. U.S. Employment Report tomorrow.

Currencies – USD & DXY Index hit hard for the 2nd day in a row.

Commodities – Crude oil started bid but rolled over. Gold in rally mode.

CDX IG: +1.67 to 109.37

CDX HY: +7.12 to 529.43

CDX EM: -1.33 to 374.22

o   Swaps: 5yr thru 30yr spreads had a delayed reaction to the Tsy coupon cuts from yesterday

-Tony Farren

 

IG Primary Market Talking Points

 

Word to the wise – today was the highest volume day for High Yield new issuance in two months with three transactions printing a total of $2.49b.

Praxair Inc. (NYSE:PX) upsized a tap of today’s Senior Notes new issue to $275mm from $250mm which also launched and priced at the tightest side of guidance.

The average spread compression across today’s 1 IG Corporate-only new issues was 12 bps from IPTs to the launch.

 

Syndicate IG Corporate-only Volume Estimates for This Week and February

 

IG Corporate New Issuance Next Week
2/01-2/05
vs. Current
WTD – $6.025b
February 2016 vs. Current
MTD – $6.025b
Low-End Avg. $23.75b $25.37% $90.9375b $6.63%
Midpoint Avg. $24.375b $24.72% $92.1875b $6.54%
High-End Avg. $25.00b $24.10% $93.4375b $6.45%
The Low $15b $40.17% $60b $10.04%
The High $35b $17.21% $110b $5.48%

 

 

Have a great evening!

Ron Quigley

 

Below please find my synopsis of everything Syndicate and Secondary from today’s debt capital markets, including the investment grade corporate bond data drill down as seen from my seat here in Syndicate, Sales and DCM.

 

NICs, Bid-to-Covers, Tenors and Sizes

 

Here’s a review of this week’s key primary market driver averages for IG Corporates only through Thursday’s session followed by the averages for the prior four weeks:

 

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
2/01
TUES.
2/02
WED.
2/03
TH.
2/04
LAST WEEK’S
AVERAGES
AVERAGES
Week 1/18
AVERAGES
Week 1/11
AVERAGES
Week 1/04
New Issue Concessions 10.5 bps 4.5 bps 7.67 bps 3 bps 21.77 bps 14.25 bps 12.66 bps 7.62 bps
Oversubscription Rates 4.35x 3x 2.74x 2x 2.71x 1.96x 2.39x 3.09x
Tenors 5 yrs 5 yrs 9.29 yrs 10 yrs 7.43 yrs 5.33 yrs 7.41 yrs 6.76 yrs
Tranche Sizes $500mm $400mm $621mm $275mm $940mm $1,235mm $1,901mm $866mm

 

New Issues Priced

Today’s recap of visitors to our IG dollar Corporate and SSA DCM:

Please note that for ratings I use the better two of Moody’s, S&P or Fitch.

 

IG

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
Praxair Inc. (tap) A2/A 3.20% 1/30/2026 275 +120a +110a (+/-2) +108 +108 JPM/MIZ/WFS

                                                               

SSA

Issuer Ratings Coupon Maturity Size IPTs GUIDANCE LAUNCH PRICED LEADS
IBRD Aaa/AAA FRN 2/11/2021 500 3mL +28 3mL+28 3mL+28 3mL+28 BAML-sole
JFM A1/A+ 2.125% 2/12/2021 500 MS +95a MS +95a MS+95 +92 BARC/CITI/NOM

 

Lipper Report/Fund Flows

 

For the week ended January 27th , Lipper U.S. Fund Flows reported an outflow of $1.187bn from corporate investment grade funds (2016 YTD net outflow of $3.495bn) and a net inflow of $883.3m from high yield funds (2016 YTD net outflow of $4.076bn).

Over the same period, Lipper reported an outflow of $783.7m from loan participation funds (2016 YTD net outflow of $2.489bn).

Emerging Market debt funds reported a net outflow of $407.7m (2016 YTD outflow of $1.268bn).

 

IG Secondary Trading Lab

 

BAML’s IG Master Index widened 2 bps to +208 versus +206.  +106 represents the post-Crisis low dating back to July 2007.

Standard & Poor’s Global Fixed Income Research widened 1 bp to +252 versus +251.  The +140 reached on July 30th 2014 represents the post-Crisis low.

Investment grade corporate bond trading posted a final Trace count of $18.3b on Wednesday versus $19.1b Tuesday and $17.9b the previous Wednesday.

The 10-DMA stands at $18.4b.

The top three most actively traded IG-rated issues were led by ABIBB 4.90% due 2/01/2046 that saw evenly weighted client flows account for 88% of the volume.

ABIBB 2.65% due 2/01/2021 finished second with two-way client and affiliate flows representing for 87% of the volume.

AIG 4.875% due 6/01/2022 placed third displaying 100% client flows and with sales outweighing purchases by a 3:2 margin.

 

New Issue Volume

 

Index Open Current Change  
IG25 107.695 109.574 1.879
HV25 360.50 356.175 4.325
VIX 21.65 21.84 0.19  
S&P 1,912 1,915 3
DOW 16,336 16,416 80  

 

USD IG Corporates USD Total IG (+ SSA)
DAY: $0.275 bn DAY: $1.275 bn
WTD: $6.025 bn WTD: $13.409 bn
MTD: $6.025 bn MTD: $13.409 bn
YTD: $133.009 bn YTD: $183.533 bn

 

Economic Data Releases

 

TODAY’S ECONOMIC DATA PERIOD SURVEYED ESTIMATES ACTUAL NUMBER PRIOR NUMBER PRIOR REVISED
Challenger Job Cuts YoY January —- 41.6% <27.6%> —-
Nonfarm Productivity Q4 <2.0%> <3.0%> 2.2% 2.1%
Unit Labor Costs Q4 4.3% 4.5% 1.8% 1.9%
Initial Jobless Claims Jan. 30 278k 285k 278k 277k
Continuing Claims Jan. 23 2240k 2255k 2268k 2273k
Bloomberg Consumer Comfort Jan. 31 —- 44.2 44.6 —-
Factory Orders December <2.8%> <2.9%> <0.2%> <0.7%>
Factory Orders Ex Trans December —- <0.8%> <0.3%> <0.7%>
Durable Goods Orders December <4.5%> <5.0%> <5.1%> —-
Durables Ex Transportation December —- <1.0%> <1.2%> —-
Cap Goods Orders Nondef Ex Air December —- <4.3%> <4.3%> —-
Cap Goods Ship Nondef Ex Air December —- 0.2% <0.2%> —-

 

Rates Trading Lab

 

Treasuries seem to have a bid on every back-up. Of course tomorrow’s number matters, but it will take a VERY strong number to get rates to rise significantly, and even if they do, there will likely be buyers. A weak number will only continue the trend we have seen and take tightening out of the picture altogether. That doesn’t mean we cannot correct, however. There have been lots of whispers pointing out the risks to weaker payroll numbers tomorrow. These include the weaker ISM Manufacturing employment component, claims data, Challenger job cuts, and the difference between “Jobs-Hard-to-Get” and “Jobs Plentiful,” which decreased to -0.6 in January vs. -0.3 December. I can’t tell you what’s going to happen, only that tomorrow will be a tough trading day. 10yr support comes in at 1.89, 1.95 and 1.98. 1.64 is the ultimate target for the bulls at the moment, but I’d be sure we will do a lot of work around 1.75 first. Interestingly, 1.88 is the 23.6% Fibonacci correction from 1.64 to 2.55 (see attached chart). We have also been holding true to technical levels in TY on an intra-day basis, so I will update those in the AM.

-Jim Levenson

 

UST Resistance/Support Table

 

CT3 CT5 CT7 CT10 CT30
RESISTANCE LEVEL 100-262 100-276 101-12 104-03 107-06
RESISTANCE LEVEL 100-24+ 100-24 101-07 103-25 106-30
RESISTANCE LEVEL 100-23+ 100-22 101-03+ 103-18+ 106-16
           
SUPPORT LEVEL 100-192 100-166 100-30 103-01 105-15+
SUPPORT LEVEL 100-17 100-13 100-26 102-23+ 104-16
SUPPORT LEVEL 100-15+ 100-102 100-22 102-16+ 104-01+

 

Tomorrow’s Calendar

 

China Data: Nothing Scheduled

Japan Data: Official Reserve Assets, Leading Index CI, Coincident Index

Australia: AiG Perf of Construction Index, Retail Sales,Foreign Reserves

EU Data: GE-Dec Man Ords

S. Data: Jan NFP, Dec Trade, Dec Cons Cred

Supply: Nothing Scheduled

Events: RBA Statement on Monetary Policy

Speeches: Mester tonight in NYC, Constancio, Nouy (more…)