Morning Commentary: High-grade primary market quiet as session starts; Ford Motor eases

By Cristal Cody

Eureka Springs, Ark., Dec. 13 – Investment-grade primary activity opened to a quiet start early Tuesday as the Federal Reserve’s Federal Open Market Committee kicked off its two-day monetary policy meeting.

Rates are widely expected to be raised, with some analysts expecting a hike of 25 basis points following the conclusion of the meeting on Wednesday.

Investment-grade bonds were seen modestly softer in the secondary market.

Ford Motor Co.’s 5.291% senior notes due 2046 traded about 2 bps weaker.

The three-month Libor yield was unchanged at 96 bps early Tuesday, a source said.

Secondary trading volume in the investment-grade bond market totaled $16.5 billion on Monday, according to Trace.

Ford Motor eases

Ford Motor’s 5.291% notes due 2046 (Baa2//BBB) were seen about 2 bps wider in secondary trading at 218 bps offered, according to a market source.

The company sold $1.3 billion of the notes on Dec. 5 at par with a spread of 220 bps over Treasuries.

The automaker is based in Dearborn, Mich.

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