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US markets carved another day of gains as the second half of 2021 kicked off. Jobless claims for the prior week were at 364k, the lowest since the onset of the pandemic. S&P was up 0.5% and the tech heavy Nasdaq was up 0.1%. Most sectors were in the green led by Energy, up 1.7% and Healthcare up 0.9%. US 10Y Treasury yields were stable at 1.47% and investors look forward to the NFP report for June that will be released later today. European markets closed higher buoyed by the sharpest rise in manufacturing activity since 1997. Markit’s Eurozone final manufacturing PMI stood slightly better at 63.4 against estimates of 63.1 – FTSE up 1.3%, CAC up 0.7% and DAX up 0.5%. US IG and HY CDS spreads tightened 0.1bp and 0.7bp respectively. EU main and crossover CDS tightened 0.6bp and 2.5bp respectively. Saudi TASI was largely flat and Abu Dhabi’s ADX was up 0.9%. Brazil’s Bovespa was down 0.9%. Asian markets are again looking for direction – Singapore’s STI and Nikkei were up 0.4% and 0.3% respectively while HSI and Shanghai were down 0.7% and 0.3% respectively. Asia ex-Japan CDS spreads were 0.3bp wider.
Turkey raised €1.5bn via a 6Y bond at a yield of 4.5%, 25bp inside initial guidance of 4.75% area. The bonds were unrated. The bonds were priced 45bp over to its 5.2% bonds due 2026 that yield 4.06%. The bonds were issued after raising $2.5bn via a 5Y Sukuk issuance a few weeks earlier at a yield of 5.125%
SocGen raised €1bn ($1.18bn) via a 6Y bond at a yield of 0.266%, 20bp inside initial guidance of T+65bp area. The bonds have expected ratings of A1/A/A received orders over €1.5bn, 1.5x issue size.
In case you missed it, click on the button below to read the report for the quarter ended June with box and whisker plots of price returns of investment grade and high yield bonds, largest deals and top gainers and losers.
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SONIA stands for the Sterling Overnight Interest-rate Average, and refers to the overnight interest rate at which banks would lend funds in the interbank markets, denominated in Sterling. This is considered an effective benchmark and has been identified to replace the GBP LIBOR that will be discontinued from 2022. SONIA is similar to the EONIA rate that will replace the Euribor in Europe.
UOB said that it received approval from bondholders to convert the benchmark reference for its £350mn (S$650.7mn) floating-rate covered bonds due 2023 to SONIA from GBP LIBOR.
On the risk in the record $535 billion junk bond issuance as borrowing costs fall to new lows