Global primary markets have come alive as shops open for the New Year. Nineteen borrowers stepped forward in the US high-grade primary market pricing $34 billion across 20 deals, the 3rd highest deal count day on record and the 9th highest notional day on record. Issuers payed about 8bps concession on average as books were 2.6x covered.. In Europe 16 issuers brought 22 tranches amounting to €21.23bn. This included €1.3bn fir Toyota Motor Finance Netherlands, 3’s and 5’s.
In the US$ Asia market Tuesday saw Sumitomo Mitsui Financial Group raise US$5.8bn over 5 tranches, CBA issued $1.5bn in two parts and multi-tranche mandates came from Kexim, Hong Kong and Posco, scheduled to be priced today.
Secondary markets had a quiet start to the new year with Japan still on holiday. Onshore accounts continue to be better buyers, so overall tone was pretty firm, particularly the front end where onshore banks were loading up before Chinese New Year. A relatively stable backdrop in China stocks helped HY open unchanged with balanced flows.
Indonesia and Philippine sovereigns were under a bit of pressure with new issuance expected. Sukuks were supported by middle east buying. In India there was interest in renewables and non-banking financial companies, but it seems that the street is light on industry.
After a quiet, but positive start on Wednesday as the China space rallied strongly, again onshore institutions digging into bonds. SOE’s are 5bps-25bps tighter, TMT 10-30bps tighter and property 2-3 points higher
After the UST supply overnight eyes will be on US ISM manufacturing for December, which is expected to fall below 50, and then FOMC minutes. Yesterday’s primary wave will spill over to today’s session with a $5bn deal from EIB leading the way.