The high-yield market was steady over the past week after the widely anticipated Fed decision to raise rates by 25bps, coupled with the overall hawkish report on economic conditions reinforced expectations for at least two more rate hikes next year. The yield to worst/spread on the Bank of America High-Yield Index (BAML) widened 8bps/10bps over the week to close at 6.29%/+438bps, respectively. Treasury yields surged higher again this week with the yield on the US 10-year note closing at a new YTD high of 2.59%. Oil prices remained steady trading above $50 all week after the OPEC agreement, closing just below $52.

High-yield retail mutual and exchange traded funds recorded an inflow of $3.75 billion for the week ended Dec 14th, the third largest inflow YTD and the fourth consecutive weekly inflow overall. The YTD total inflow now stands at $10.55 billion. The market saw a surge of new issue activity this week on strength in oil prices and the glut of inflows over the past month. December has now seen 25 deals for $19 billion, making it the busiest December since 2013.

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. Fund flow data as reported by Lipper for the week running Thursday to the following Wednesday.