High-yield moved steadily higher this week as oil rebounded from a 12-year low and retail funds reported their first weekly inflow of 2016. Yields dropped and spreads tightened each of the five trading session this week, ultimately closing 27bps and 13bps tighter at 9.16% and 774bps, respectively, for the Bank of America High Yield Index (BAML). Since hitting a credit cycle high of 9.77% last Thursday, the yield on the index has come in 61bps in just six trading days as the market remains subject to violent swings. The US 10-year note closed at 1.92% on Friday, its lowest yield since 4/24/15.

High-yield fund flows turned positive this week with Lipper reported an inflow for the week ending 1/28 totaling $883 million, the first weekly inflow of the year and coming on the heels of two consecutive $2 billion+ outflows. Despite the turn in investor sentiment this week, the YTD total reading remains deeply in the red totaling just over -$4 billion. Issuers came off the sideline this week against an improving market backdrop with five deals for $3.4 billion pricing, easily the busiest week of the new year with the previous four weeks only producing four deals combined. YTD the total issuance now stands at nine deals for $5.515 billion.

The Bank of America Merrill Lynch 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.