Morning Commentary: High-grade action slows on packed week; Freddie Mac plans deal

By Cristal Cody

Tupelo, Miss., Nov. 3 – The high-grade primary market is expected to stay quiet for a second session on Tuesday with all eyes on the U.S. presidential election.

The primary market opened the week with no reported issuers.

Meanwhile, Freddie Mac is gearing up to price a benchmark-size offering of three-year Reference Notes in a deal scheduled to settle on Thursday.

Market participants are anticipating anywhere from zero to about $10 billion of investment-grade bond volume this week.

Also distracting from supply this week is the Federal Reserve’s two-day monetary policy meeting that ends on Thursday, and the Labor Department’s release of the October non-farm payroll report on Friday.

Focus also remains on third-quarter earnings releases with numerous companies scheduled to post reports over the day, including high-grade bond issuers Sysco Corp., Exelon Corp. and Prudential Financial, Inc.

Market tone was mixed over the morning.

The iShares iBoxx Investment Grade Corporate Bond ETF slipped 0.06% to $133.90.

The Pimco Investment Grade Corporate Bond index edged up 0.09% to $114.34.

Stock indices were up across the board. The Dow Jones industrial average improved 2.23%, while the S&P 500 gained 2.09% in early trading.

Trading volume in the high-grade secondary market was steady on Monday with $18.92 billion of bonds traded, according to Trace.

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