High-yield is opening the new month and quarter with a better tone again this morning as buyers selectively look to take advantage of new market levels after the September pullback. Flows remain choppy with $200 million entering passive ETF’s and $300 million leaving active strategies yesterday, the weekly tracking number total now stands at an outflow of just under $2 billion after heavy outflows to end last week. Rates and Fed actions remain squarely in focus for the market, with the next data point coming Friday in the form of the Payroll number. We expect markets to remain volatile and in search of the next catalyst for the time being driven by daily flows and shifts in market sentiment. Global bonds are rallying this morning on speculation of more definitive stimulus policies from the ECB with US 10yr trading 8bps tighter to yield 2.41% in early trading. One new issue priced yesterday for proceeds of just over $1 billion as the primary market re-opened after a few days off given the stabilizing market backdrop.

Daily fund flow information sourced from J.P. Morgan.