Morning Commentary: Market focus on Fed speech; Occidental Petroleum, FedEx firm; CDX softens

By Cristal Cody

Eureka Springs, Ark., March 29 – High-grade bonds opened modestly better with trading activity mostly quiet early Tuesday ahead of Federal Reserve chairman Janet Yellen’s 11:30 a.m. ET speech to the Economic Club of New York.

Occidental Petroleum Corp.’s senior notes (A3/A/A) that priced on Monday traded about 2 basis points tighter in the secondary market.

FedEx Corp.’s 4.55% bonds due 2046 improved about 1 bp in secondary trading from Monday.

The Markit CDX North American Investment Grade index opened 1 bp softer at a spread of 84 bps.

The three-month Libor yield was unchanged at 63 bps.

On Monday, $12.26 billion of investment-grade bonds were traded, according to Trace.

Occidental Petroleum better

Occidental Petroleum’s 3.4% notes due 2026 firmed to 153 bps offered, a secondary market source said.

The notes were sold on Monday in a $1.15 billion tranche at a spread of Treasuries plus 155 bps.

Occidental Petroleum’s 4.4% notes due 2046 traded early Tuesday at 178 bps offered.

The company sold $1.2 billion of the bonds in Monday’s offering at Treasuries plus 180 bps.

The oil and gas, chemical and midstream company is based in Los Angeles.

FedEx modestly improves

FedEx’s 4.55% bonds due 2046 traded about 1 bp tighter early Tuesday at 181 bps offered, according to a market source.

FedEx sold $1.25 billion of the bonds (Baa2/BBB) on March 21 at 185 bps over Treasuries.

The package and freight transportation company is based in Memphis, Tenn.

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