High Yield Morning Update

High yield moved lower for the sixth consecutive session yesterday pushing yields north of 6% for the first time in over two-months as oil continued to struggle and new issue paper continued to flood the market. The yield-to-worst/spread on the Bank of America High-Yield Index widened 13bps/9bps on the day to close at 6.02%/+388bps, off  45bps/31bps in just the past six trading days. The primary market was hammered with new issue paper for the third consecutive day as eight more deals for $6.65 billion priced, making it the busiest day for issuance since March 2015, as issuers continued to rush to market ahead of the Fed’s decision next week. Investors soured on the high-yield market last week as a Fed hike became near certainty, with retail funds reporting the largest outflow from the asset class since early November totaling $2.1 billion. Oil closed at its lowest level since November at $49.28, down from an 18-month high in just 10 trading days. Treasuries continued to lose ground extending their longest losing streak in five years as the yield on the 10yr Treasury note continued to edge higher closing at 2.61% this morning. US futures are bouncing a touch after what has been a tumultuous week with equity and oil futures pushing higher in early trading. The high-yield market is opening flat, taking a pause from the recent sell-off as investors survey the new landscape after the six-day slide. The forward calendar looks fairly quiet to start the day.

The Bank of America Merrill Lynch US High Yield Index monitors the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market.  Index data sourced from Bloomberg. Yield referenced is the yield-to-worst and spread referenced is the spread-to-worst.  Fund flow data according to weekly reporters to Lipper for the week running Thursday to the following Wednesday.
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