Morning Commentary: Investment-grade primary market quiets ahead Fed press conference

By Cristal Cody

Tupelo, Miss., Jan. 30 – The high-grade bond market stayed quiet at the start of Wednesday’s session with no reported issuers marketing bonds ahead of the end of the Federal Reserve’s monetary policy meeting.

No rate changes are expected by market analysts from the first meeting of 2019, but under a new policy that took effect in January, press conferences will be held after each central bank meeting with one scheduled for Wednesday.

High-grade issuers already have priced more than $15 billion of corporate bonds in the first two session of the week.

Only about $15 billion to $20 billion of supply was forecast for the entire week by syndicate sources.

The Province of Ontario is marketing a tap of its Canadian dollar-denominated 2.65% bonds due Feb. 5, 2025 (Aa2/A+//DBRS: AA) in an offering announced on Tuesday and registered with the Securities and Exchange Commission. Ontario sold C$1 billion of the bonds on Jan. 25, 2018 at 99.759 to yield 2.688%, or a spread of 53.3 basis points over the Government of Canada benchmark.

Secondary trading also has been strong week to date in the investment-grade secondary market. On Tuesday $29.95 billion of high-grade issues were traded, up from $21.02 billion on Monday, according to Trace data.

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