U.S. central bankers look poised to discuss the future of the Federal Reserve’s asset-purchase program when they meet again in November, potentially heralding a shift in what they buy, or an increase in how much they purchase. The ramifications of the discussion will have significant implications for the US bond market. Adapt and adjust to…
CreditSights analysts combed through the Fed’s latest portfolio data for trends and found the central bank’s daily purchases dwindled to about $21 million on average through July 30, down from about $180 million of daily buying when the program kicked off in May. The question is where do corporate bond spreads go once the market…
U.S. companies have rushed to borrow, selling more than $1 trillion of high-grade notes in just the last few months, and some of the proceeds have trickled down to banks. Underwriting fees for blue-chip U.S. company bonds in the first half of the year essentially doubled to more than $7 billion, year over year. Use…
Titans such as Microsoft, Apple and Home Depot have been among the beneficiaries of the Fed’s bond buying program. Although the purchases have been light, questions have been raised over “moral hazard” as the Fed buys debt from these companies that don’t seem to need the central bank’s help. Track for dislocations in the corporate…
The Fed’s SMCCF buying program has two effects on the markets and trading. Firstly, its very existence creates confidence that the central bank will buoy up the corporate debt market to counter the impact of COVID-19. Secondly, it actively creates directional investment in the market which generates real liquidity. As the program is set to…
Issuers have rushed to market to sell more than US$660bn of the US high-grade bonds in the roughly two months since the Federal Reserve announced its corporate bond purchasing program. Although there is no sign of the issuance slowing, the looming risk of a second wave of Covid-19 only heightens the uncertainty for issuers seeking…
The Fed’s support has driven up prices for ETFs, after announcing recently it would buy corporate bond exchange-traded funds for its corporate credit facility. Use Overbond to screen for the bond ETFs by pricing with deep liquidity profiling to view individual constituents. Source: MarketWatch The numbers: The Federal Reserve’s balance sheet increased to $7.09 trillion for…
The Fed has been lauded for doing more for the broader Main Street economy during this pandemic-induced crisis than back in ’08-’09 when seen as mostly as Wall Street’s savior. Source: Bloomberg Federal Reserve Chair Jerome Powell and his colleagues had a hard decision to make as the coronavirus epidemic worsened in February and March….
Fed Chairperson Powell calls current policy stance “appropriate”, with the economy in a “good place. Source: Thomson Reuters WASHINGTON (Reuters) – Federal Reserve Chair Jerome Powell told Congress on Tuesday that the U.S. economy is in a good place, even as he cited the potential threat from the coronavirus in China and concerns about the…
Volatility and uncertainty in global markets is having its toll on high yield bond ETFs. Source: Bloomberg The volatility in global markets is wearing on exchange-traded funds that buy risky corporate debt as investors pull money out. Traders yanked $907 million from BlackRock Inc.’s iShares iBoxx High Yield Corporate Bond exchange-traded fund, or HYG, on…
With trading volumes for US corporate bonds up
