US: Corporate Credit Update: Moving Higher as Stocks Extend Lows

May-12 17:54

Inside range for investment-grade corporate credit risk Thursday, mildly higher as equities extended session lows in the second half.

  • Investment grade risk measured by Markit's CDXIG5 index inched +0.346 higher at 88.135 vs. 85.723 low (near Mon's 2Y high of 90.438); CDXHY5 high yield index at 100.143 (-0.279).
  • Outperforming credit sectors (tighter or least wide): Energy (+1.0), Communications (+1.4), while debt holdings for Utilities, Industrials and Technology held (1.5)
  • Lagging sectors (wider or least narrow): Financials subordinated (+3.4), Consumer discretionary (+2.9).

Historical bullets

US TSY OPTIONS: Large OTM 5Y Call Sale

Apr-12 17:45
  • -30,000 FVK 115.5 calls, 1 ref 113-24.5

PIPELINE: John Deere, Ferguson Finance Launched

Apr-12 17:40

Well off Monday's pace after $12.75B Amazon 7pt jumbo pushed week opener issuance to $23.5B. IDB rolled to Wednesday, suspect balance of week to be thin ahead early Easter holiday close Thu, no trade Friday.

  • Date $MM Issuer (Priced *, Launch #)
  • 04/12 $600M #John Deere Capital 7Y +65
  • 04/12 $1B #Ferguson Finance $300M 5Y +165, $700M 10Y +200
  • Expected Wednesday:
  • 04/13 $Benchmark IDB 3Y SOFR+35a

GBPUSD TECHS: Path Of Least Resistance Remains Down

Apr-12 17:30
  • RES 4: 1.3439 High Feb 25
  • RES 3: 1.3398 61.8% retracement of the Feb 10 - Mar 15 downleg
  • RES 2: 1.3252/98 50-day EMA / High Mar 23
  • RES 1: 1.3136/83 20-day EMA / High Mar 30
  • PRICE: 1.3041 @ 16:04 BST Apr 12
  • SUP 1: 1.2983 Low Apr 8
  • SUP 2: 1.2954 1.764 proj of the Jan 13 - 27 - Feb 10 price swing
  • SUP 3: 1.2933 Low Nov 5 2020
  • SUP 4: 1.2855 Low Nov 2 2020 and a key support

GBPUSD remains vulnerable. The pair traded lower Friday, resulting in a print below key support at 1.3000, the Mar 15 low and a bear trigger. The move lower confirms a resumption of the primary downtrend and an extension of the recent pullback from 1.3298, the Mar 23 high. A continuation lower would open 1.2954, a Fibonacci projection level. Initial resistance is at 1.3125, the 20-day EMA ahead of the key 50-day EMA level at 1.3243.