Midday Commentary: Convertibles notch thin post-holiday trade; Workday in focus ahead of earnings

By Rebecca Melvin

New York, May 27 - A lack of early catalysts contributed to thin post-holiday trading in convertibles early Tuesday - the week's first session following the Memorial Day weekend - as equities picked up where they left off, tracking higher, and U.S. Treasury yields and the CBOE Volatility Index hovered around unchanged at recent low levels. The S&P 500 stock index plodded further into record territory, however.

In economic news, the Commerce Department reported orders for U.S. durable goods rose in April by 0.8%, which was better than many economists expected. The figure was buoyed by an uptick in orders for defense equipment.

Workday Inc. was in focus ahead of the quarterly earnings report expected after the market close for the Pleasanton, Calif.-based human resources and financial cloud computing company.

Workday's 0.75% convertibles and 1.5% convertibles were not heard in trade but were recently around 121 with the underlying share price at $81.00.

Early Tuesday, Workday shares were up $2.87, or 3.7%, at $81.17.

Vipshop Holdings Ltd.'s 1.5% convertibles due 2019 were seen trading little changed to slightly better at between 110 and 112, which marks a handsome recovery from levels well below par in April. The rebound in the convertibles has been in tandem with a recovery in the underlying shares of the Guangzhou, China-based online discount retailer.

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