Midday Commentary: Ford's 4.375% notes due 2023 wider as market focuses on Fed purchases

By Cristal Cody

Tupelo, Miss., Aug. 2 - Investment-grade bonds widened early Friday as Treasuries soared after the government's July job report came in lower than expected, casting doubt on the Federal Reserve's quantitative easing program ending in September, market sources said.

The Labor Department reported an additional 162,000 jobs for the month, below the 185,000 expected. The unemployment rate fell to 7.4% from 7.6%.

Market sources widely expected the Federal Reserve to slow the $85 billion-a-month asset purchases following its September policy meeting.

Ford Motor Credit Co. LLC's new 4.375% senior notes due 2023 (Baa3/BB+/BBB-) traded about 2 basis points wider at 174 bps bid, 172 bps offered in the morning session on Friday but still tighter than issuance, according to a market source.

The financing arm of Dearborn, Mich.-based auto company Ford Motor Co. sold the notes on Thursday at a spread of Treasuries plus 178 bps.

The notes traded at 172 bps bid, 169 bps offered late on Thursday.

The Markit CDX Series 20 North American Investment Grade index started the day at a spread of 74 bps.

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