High Yield Daily Update

High yield bonds are opening flat after finishing in the red yesterday, the downward pressure being from the 10-year US Treasury yield pushing to 3% again.  The Bloomberg Barclays US Corporate High Yield index was down -0.01% yesterday.*  The light new-issue market and outflows are also creating some of this weakness.  We are seeing the final demand for the PPI come in a tad under estimates and a lack of wage increase push back against those calling for a 4% 10-year US Treasury yield and much higher inflation.

On the flip side oil is up, nearing $71 on the back of the US pulling out of the Iran deal.  Many experts are predicting oil to go to $80 – $90 per barrel.  OPEC shows Iran oil production at 3.8M bpd while the Iran Oil Ministry reports they produce 2.6M bpd as of April 1st.

* Bloomberg Barclays U.S. Corporate High Yield Index covers the universe of fixed rate, non-investment grade debt (source Barclays Capital).
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