High Yield Morning Update

High-yield bond prices rebounded sharply over the past two days, erasing more than a weeks’ worth of loses,  after the Fed’s statement calmed the jittery market, reiterating a gradual hike approach and lack of intention to raise over the next few meetings. The yield-to-worst/spread on the Bank of America High-Yield Index tightened 13bps/14bps yesterday to close at 5.94%/+388bps, down 24bps/17bps in the past two sessions. Issuance resumed in a big way yesterday as six issuers and seven tranches priced for $4 billion in proceeds. Oil rallied at the open but faded into the close to finish down 0.24% at $47.72. Lipper reported the second biggest outflow ever of $5.68b from mutual and exchange traded funds for the week ending 3/15 (reporting week Thursday to Wednesday), making the total outflow over the past two weeks $8 billion. Overnight EM headed for its best week in eight months, even as the global equities rally looked to take a breather. Oil prices are poised for their first weekly gain in March, while the USD is on its way towards its biggest weekly loss since February. High-yield is generally opening the day flat and quiet after what has been a volatile week as investors look forward to the weekend.

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.
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