Morning Commentary: High-grade market activity quiet; Wells Fargo firms; credit spreads flat

By Cristal Cody

Eureka Springs, Ark., May 27 – High-grade market action was expected to remain mostly quiet on Friday with the bond markets closing early for the day and shut on Monday for the Memorial Day holiday.

Traders likely will be focused on Federal Reserve chairman Janet Yellen’s luncheon comments at Harvard University’s Radcliffe Institute before taking off for the three-day weekend.

In early secondary trading, Wells Fargo Bank NA’s 1.75% notes due 2019 were nearly 15 basis points tighter than where the paper priced on Wednesday.

The Markit CDX North American Investment Grade index opened the session unchanged at a spread of 77 bps.

The three-month Libor yield was stable at 67 bps early Friday.

On Thursday, secondary trading volume totaled $17.23 billion, compared to $18.78 billion on Wednesday, $16.83 billion on Tuesday and $13.22 billion on Monday, according to Trace.

Wells Fargo firms

Wells Fargo Bank’s 1.75% notes due 2019 were quoted early Friday at 56 bps offered in the secondary market, a source said.

The company sold $1.75 billion of the notes (Aa2/AA-/AA) on Wednesday at a spread of 70 bps over Treasuries.

The Sioux Falls, S.D.-based bank is a subsidiary of Wells Fargo & Co.

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