Morning Commentary: Investment-grade bond market action slows; Deutsche Bank firms; JPMorgan eases

By Cristal Cody

Eureka Springs, Ark., Nov. 8 – Activity in the investment-grade bond markets slowed as expected early Tuesday with the U.S. presidential election under way and concerns about market reaction on Wednesday to the outcome.

About $5 billion to $10 billion of high-grade issuance is expected for the week, according to market sources. On Monday, about $1 billion of investment-grade bonds priced from three issuers.

In the secondary market, bonds were mixed.

Deutsche Bank AG’s 4.25% notes due 2021 firmed about 1 basis point.

JPMorgan Chase & Co.’s 2.95% senior notes due 2026 softened about 1 bp.

The three-month Libor yield was unchanged at the start of the day at 88 bps.

During Monday’s session, $14 billion of investment-grade issues were traded, according to Trace.

Deutsche Bank modestly better

Deutsche Bank’s 4.25% notes due 2021 traded about 1 bp tighter at 291 bps offered, according to a market source.

The bank priced a $1.5 billion add-on to the notes on Oct. 11 at a spread of Treasuries plus 290 bps. The notes were originally sold in a $3 billion tranche on Oct. 7 at Treasuries plus 300 bps.

Deutsche Bank is a banking and financial services company based in Frankfurt.

JPMorgan softens

JPMorgan Chase’s 2.95% notes due 2026 eased about 1 bp to 123 bps offered, according to a market source.

JPMorgan Chase sold $3 billion of the notes (A3/A-A+) on July 14 at a spread of 145 bps over Treasuries.

The financial services company is based in New York City.

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