Morning Commentary: High-grade primary quiet as session starts; secondary pace strong

By Cristal Cody

Tupelo, Miss., July 11 – Investment-grade deal action remained quiet at the start of Wednesday’s session after the primary market’s first corporate supply in more than a week came on Tuesday.

Market focus early Wednesday centered on trade concerns at the start of the NATO Summit and additional proposed U.S. tariffs against China, a source said.

Stocks were down, while Treasuries rallied over the morning.

Corporate deal volume on Tuesday included new notes from Bank of Montreal, Toyota Motor Corp. and PacifiCorp.

Japan Bank for International Cooperation and the European Investment Bank also priced bonds.

On Monday, the Commonwealth Bank of Australia sold $1.25 billion of five-year covered bonds as the sole reported issuer. Investment-grade issuers stayed out of the primary market in the previous week.

Syndicate sources expect about $15 billion to $20 billion of new bond issuance this week.

High-grade secondary trading activity has been strong over the past two sessions, with trading volume of $18.82 billion on Tuesday and $18.80 billion on Monday, according to Trace.

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