Morning Commentary: High-grade market quiet; Morgan Stanley improves; secondary volume strong

By Cristal Cody

Eureka Springs, Ark., Jan. 20 – The high-grade bond markets opened mostly quiet early Friday with much of the global focus on the inauguration of president-elect Donald Trump later in the day.

U.S. Bancorp detailed its $1.5 billion sale of series V five-year fixed- and floating-rate medium-term senior notes (A1/A+/AA) on Thursday in FWP filings with the Securities and Exchange Commission.

The three-month Libor yield ticked up 1 basis point to 1.03% on Friday.

In secondary trading, Morgan Stanley’s long bonds that priced on Tuesday modestly improved.

Secondary trading volume has been heavy over the past two sessions. On Thursday, $23.47 billion of investment-grade issues were traded, compared to $22.1 billion on Wednesday, according to Trace.

Most issues have been weaker in secondary trading on Wednesday and Thursday. On Thursday, of the 5,639 issues traded, 3,706 declined, according to Trace.

Morgan Stanley improves

Morgan Stanley’s 4.375% notes due 2047 were seen in the secondary market early Friday about 1 bp better at 141 bps offered, a source said.

The notes (A3/BBB+/A) were brought to market on Tuesday in a $2.25 billion tranche at a spread of Treasuries plus 148 bps.

The financial services company is based in New York City.

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