Morning Commentary: High-grade primary action quiets ahead of Fed decision; MetLife tightens

By Cristal Cody

Eureka Springs, Ark., Dec. 14 – Activity stayed mostly quiet as the investment-grade bond market opened on Wednesday with investors and traders focused on the Federal Reserve’s Federal Open Market Committee monetary policy decision expected later in the day.

“Market expectations call for a ‘dovish tightening,’ where the FOMC raises rates by 25 [basis points] and signals 50 bps, at most, for next year,” Confluence Investment Management LLC strategists said in a note on Wednesday.

In the secondary market, MetLife Global Funding I’s 3.45% notes due 2026 (Aa3/AA-) that priced on Monday improved 5 bps.

The three-month Libor yield was unchanged at 96 bps over the morning, according to a market source.

High-grade secondary trading volume rose to $19.31 billion on Tuesday from $16.50 billion on Monday, according to Trace.

MetLife tightens

MetLife Global Funding I’s 3.45% notes due 2026 traded better at 92 bps offered in the secondary market, a source said.

MetLife priced $1 billion of the 10-year notes on Monday at a spread of 97 bps over Treasuries.

The issuer is a financing arm of New York City-based insurance and employee benefits company MetLife Inc.

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