The high-yield market rallied last week, trading right at the year-to-date lows, as retail funds reported large inflows and OPEC reached an agreement in principle to cut production at next month’s meeting. The yield to worst and spread on the Bank of America High-Yield Index (BAML) tightened 13bps each to close the week at 6.25%/497bps, both representing the lowest Friday close of 2016. WTI close at $48.24, up 8.45% on the week. The yield on the US 10yr note continued to compress as the fear of a December rate hike ease, closing at 1.58%, down 4bps on the week and the lowest close since early August.

US high-yield retail mutual and exchange traded funds recorded an inflow of just over $2 billion for the week ended September 28, the first inflow in the past three weeks and the largest weekly inflow since mid-July. The year-to-date inflow total improved to $9.27 billion. Issuance slowed last week with just six deals for $3.2 billion in proceeds pricing versus $6.55 billion the previous week. The final September deal tally was 46 deals for $28.585 billion in proceeds pushing the 2016 total to 272 deals and $181.845 billion in proceeds.

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. BAML HY represents the index yield for the designated date, while return/change represent the index return for the period ending date. Yield referenced is the yield-to-worst and spread referenced is the spread-to-worst.