Morning Commentary: High-grade market action thins in front of holiday; primary quiet

By Cristal Cody

Tupelo, Miss., Aug. 27 – The investment-grade bond market opened on a quiet note on Monday with thin supply expected over the final week before the Labor Day holiday.

Syndicate sources forecast zero volume to up to $5 billion of issuance for the week.

Volume slowed last week with nearly $10 billion of investment-grade corporate bonds brought to the primary market.

No reported issuers were marketing bond deals at the start of Monday’s session.

Trading desks also are thin with many out for the last week of summer holidays, sources said.

The bond markets will be closed on Sept. 3 for the holiday. An early market close on Friday is not scheduled.

Secondary trading volume also has thinned along with primary action. On Friday, $8.85 billion of high-grade bonds were traded, down from $10.46 billion in the same period a week ago, Trace data shows.

AstraZeneca plc’s 4% notes due Jan. 17, 2029 were edging up in early secondary trading to 100.54 after heading out on Friday at 99.75, according to market sources.

The Cambridge, England, biopharmaceutical company sold $1 billion of the notes (A3/BBB+/A-) on Aug. 14 as part of a $3 billion four-part offering at 99.59 to yield 4.049%, or a Treasuries plus 115 basis points spread.

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