Rates Market

Yields on the ten-year have remained range-bound this week, currently muted around ~1.09%.
The curve was slightly steeper on the week, with 2s10s at 97.1bps versus last Friday at 94.6bps.
The spread between the 5-year and 30-year bond reached highs of 142.1bps.
Overall, the outlook for the Treasury market remains focused on longer term supply and the rate of inflation pick up.

Source: Bloomberg.

Corporate Market

The corporate spread for the USD Investment Grade All Sector OAS was wider by 2 bps.
Investment Grade Bond Funds reported by Lipper saw inflows of $8.25 billion, the fourth largest ever
High-Yield Bond Funds saw outflows of $905 million vs $1.26 billion last week
As the hunt for yield continues, CCC rated bonds are yielding all time lows (see chart below)
The bulk of new debt being issued came from the financial sector
Year-to-date, $100.3 billion has been issued (-8% YoY)
There was $25.9 billion in new issues this week, compared with $25 billion projected

Source: Bloomberg.

Corporate New Issue Highlights

Municipals slightly outperformed Treasuries on the week with benchmark yields 1-3bps lower leaving ratios little changed.
The municipal market continues to be supported by supply/demand dynamics, continued inflows, as well as anticipation of additional stimulus and changes in tax policy.
Inflows into municipal funds continued for the 11^th straight week adding $2.38b for the week ended 1/20.
30-day supply sits at $10.5 billion vs. $17.8 billion in redemptions.
Next week $6.1billion is expected to price. Notable deals include; $1 billion Texas Gas, Los Angeles Dept. of Airports $758.9 million and Chicago Board of Ed $560.3 million.

Source: Bloomberg.