Slower high-grade deal pace builds amid earnings blackouts, inflation data; fund inflows jump

By Cristal Cody

Tupelo, Miss., April 5 – Investment-grade deal supply is expected to slow in the week ahead as focus turns to March inflation data due Wednesday.

About $20 billion to $25 billion of bond volume is forecast for next week with much of it potentially front-loaded, sources said.

New issuance is expected to thin with companies in earnings blackout reporting periods and the focus on the Consumer Price Index data, sources said.

High-grade issuers priced $24 billion of notes this week, in line with about $20 billion to $25 million of volume anticipated.

Friday’s “blow-out jobs report” helped give the markets a boost going into the weekend, a source said.

The Labor Department reported that total nonfarm payroll employment rose by a seasonally adjusted 303,000 in March, higher than the 214,000 economists had expected.

April is expected to post about $100 billion of bond issuance.

Fund inflows heavy

Meanwhile, inflows in short-intermediate corporate investment-grade debt funds/ETFs jumped to $4.26 billion in the week ended Wednesday from $1.9 billion in the prior week, according to Refinitiv Lipper U.S. Fund Flows.

Net inflows year to date total over $29 billion.

Also this week, inflows in high-grade bond funds and ETFs focused on high-grade corporates, agencies, mortgages and Treasuries climbed to $5.46 billion from $3.46 billion a week ago, according to a BofA Securities note released Friday.

The inflow came almost entirely from high-grade funds, which had inflows of $4.85 billion for the week ended Wednesday following a $680 million inflow a week earlier, BofA said.

ETF inflows dropped to $610 million this week from $2.79 billion in the prior week.

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