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.