The high-yield market continued to improve Wednesday pushing the yield to worst and spread on the Bank of America High Yield index another 14bps and 15bps tighter to 8.78% and +731bps, respectively. Worth noting that the yield to worst on the index is just 2bps higher than where it opened the year at 8.76%. Inflows remain a big driver of market improvement with yesterday’s session adding another $1.8 billion to high yield mutual and exchange traded funds, the second largest inflow of the year behind Tuesday. After yesterday’s session the return on the index turned positive for the year at +0.32%. No new issues priced yesterday. This morning we’re taking a pause with the market opening flat after the strong rally over the past two weeks. US economic data will take center stage the next couple days, with jobless claims coming  in slightly higher than expected; however, the four-week average dropped to the lowest level since the end of November, signaling continued strength in the labor market. Tomorrow we get NonFarm Payrolls. The attention to US economic data comes ahead of the Fed meeting on the 16th and what it could imply for interest rates.

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.  Daily fund flows sourced from J.P. Morgan.