Morning Commentary: High-grade bonds mostly soft; Wells Fargo edges wider; CDX weakens

By Cristal Cody

Eureka Springs, Ark., June 16 – Investment-grade bonds remained mostly soft in early secondary trading on Thursday after selling off on Wednesday.

Primary action is expected to remain light with just one deal on tap from Duke Realty Corp.

The Markit CDX North American Investment Grade index opened the day 2 basis points wider at a spread of 87 bps.

Wells Fargo & Co.’s 4.4% subordinated notes due 2046 traded flat to 1 bp weaker after softening 6 bps during the previous session.

The three-month Libor yield was unchanged at 65 bps over the morning.

Secondary trading volume totaled $15.46 billion on Wednesday, compared to $13.94 billion on Tuesday and $10.5 billion on Monday, according to Trace.

Wells Fargo flat to softer

Wells Fargo’s 4.4% notes due 2046 were quoted flat to 1 bp wider at 205 bps offered in early secondary trading, according to a market source.

Wells Fargo sold $2 billion of the notes on June 7 at a spread of 188 bps over Treasuries.

The financial services company is based in San Francisco.

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