US: Corporate Credit Update: Off Early Highs
Investment-grade corporate credit risk running higher at the moment, well off early highs as stocks rebound off midmorning lows heading into month/half-yr end: SPX eminis trading -21.75 (-0.57%) at 3799.25; DJIA -216.04 (-0.7%) at 30812.4; Nasdaq -102.8 (-0.9%) at 11074.95.
- Investment grade risk measured by Markit's CDXIG5 index at 101.350 (+1.210); CDXHY5 high yield index at 96.994 (-0.261).
- Outperforming credit sectors (tighter or least wide): Technology, Utilities and Industrials sectors all (+2.8) followed by Health Care (+3.0) and Communications (+3.4).
- Lagging sectors (wider or least narrow): Materials (+5.3), Financials (subordinated (+4.3), Consumer Discretionary (+3.9) followed by Sr Financials (+3.4).
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
PIPELINE: Burlington Northern Launched; Updated Guidance: VW, NAB, HSBC
- Date $MM Issuer (Priced *, Launch #)
- 05/31 $1B #Burlington Northern 30Y +140
- 05/31 $Benchmark Volkswagen 2Y SOFR+95a, 3Y +125a, 5Y +155a, 7Y +175a
- 05/31 $Benchmark Bank of Montreal 3Y +120, 3Y SOFR
- 05/31 $Benchmark NAB 3Y +80, 3Y SOFR, 5Y +110
- 05/31 $Benchmark Nordea Bank 3Y +110a, 3Y SOFR
- 05/31 $Benchmark HSBC +3NC2 +165, 6NC5 +195
- 05/31 $Benchmark Westpac 5Y SOFR+80a
CANADA: RBC: Q1 GDP Reaffirms BoC Rate Hike Call
- Real GDP increased +3.1% annualized in Q1 as robust household consumption (+3.4% despite a soft start to the quarter with Omicron restrictions) and business investment offset a sizeable decline in net trade.
- Near-term growth momentum remains firm as household services consumption rebounds, but elsewhere production capacity constraints are limiting the amount that output can increase.
- Rising costs, worsening supply chain conditions and acute labour shortages were all once again reported as key obstacles for future growth by businesses in the Q2 Survey on Businesses Conditions, and many of these cannot be addressed in the short run.
- RBC continue to look for another 50bp hike tomorrow with follow-up hikes until 2.5% later this year.
EURUSD TECHS: Edges Off Bear Channel Top
- RES 4: 1.0936 High Apr 21
- RES 3: 1.0807 Bear channel resistance drawn from the Feb 10 high
- RES 2: 1.0800 Round number resistance
- RES 1: 1.0787 High May 30
- PRICE: 1.0690 @ 15:22 BST May 31
- SUP 1: 1.0643/0533 Low May 25 / Low May 20
- SUP 2: 1.0461 Low May 18 and19
- SUP 3: 1.0350 Low May 13 and bear trigger
- SUP 4: 1.0341 Low Jan 3 2017 and a key support
EURUSD edged off recent highs Tuesday, reversing off a challenge on the top of the bear channel. The channel is drawn from the Feb 10 high and intersects at 1.0804. It marks a key short-term resistance where a break would strengthen bullish conditions and highlight a stronger short-term reversal. The primary trend remains down though and a reversal lower would reinforce a bearish theme. This would open 1.0533 initially, the May 20 low.
