Week of March 18, 2012 thru March 24, 2012

Credit Default Swaps: IG17 Series Tight, 2Y USA 2-Yr Narrow


CHICAGO, March 16 (MNI) - The benchmark index on U.S. investment grade credit default swap levels moved to a series tight Friday amid a light volume continuation of the risk-on trade, observers said.

Credit Default Swaps: IG17 Series Tight, 2Y USA 2-Yr Narrow


CHICAGO, March 16 (MNI) - The benchmark index on U.S. investment grade credit default swap levels moved to a series tight Friday amid a light volume continuation of the risk-on trade, observers said.

The IG17 has narrowed by 1.25 basis points to 88.625-89.125 bps in early afternoon trade. This was off the intraday low and new all time series tight of 88.5 bps. Credit outperformed stocks as the Dow Jones Industrials were last off four points at 13248.

Insurance against default on the USA was flat at 32 bps, its best level in 2-years. This compares to the high of 65 bps on July 28, 2011 and the low of 19 bps on September 29, 2009.

Market sources said U.S.

Portfolios:FI Mgrs: More Fed Action Possible:Could Be OT2,QE3


WASHINGTON (MNI) - While recent data point to an economic improvement in the United States, fixed income portfolio managers continue to expect, or see room, for the Federal Reserve to do more.

Talk From The Trenches: Irish Luck Trumps Convexity Blarney


NEW YORK, March 16 (MNI) - As St. Patty's Day looms, the luck of the Irish was clearly working its magic on the Treasury market.

Kansas City Fed: Barcap's Davig To Be New Director of Research


(MNI) - New Kansas City Federal Reserve Bank President Esther George has a new chief economist.

The Kansas City Fed announced Friday that Troy Davig has been named senior vice president and director of research.

Davig is returning to the Kansas City Fed after a stint on Wall Street.

Davig has been a senior U.S. economist for Barclays Capital since 2010. Before that, he worked for five years in the Economic Research Department of the Kansas City Fed, becoming a senior economist in 2006.

Davig will succeed Alan Barkema, who retired earlier this year, and his interim replacement Craig Hakkio.

US Corporate Bond Chatter: Issuers Rush To Market


NEW YORK, March 16 (MNI) - Swedish mortgage lender Swedbank Hypotek AB was the sole issuer Friday of investment-grade corporate debt, amid an upbeat but cautious tone in the domestic credit market this week as improved macro conditions eased some fears and reduced an ounce of uncertainty, traders said.

US Corporate Bond Chatter: Issuers Rush To Market


NEW YORK, March 16 (MNI) - Swedish mortgage lender Swedbank Hypotek AB was the sole issuer Friday of investment-grade corporate debt, amid an upbeat but cautious tone in the domestic credit market this week as improved macro conditions eased some fears and reduced an ounce of uncertainty, traders said.

Friday, as the momentum of high grade debt issuance wound down from its brisk clip this week, Swedbank Hypotek AB launched $1.5 billion of 5-year covered bonds at a spread of 105 basis points more than the mid-swap rate.

The deal, rated 'A2' by Moody's Investors Service and 'A+' by Standard & Poor's, is being jointly led by Bank of America Merrill Lynch, Deutsche Bank, J.P. Morgan and UBS.

US Swaps: Front End Gaps Tighter Amid Payer/Curve Unwinds


Chicago, March 16 (MNI) - Front end spreads gapped tighter and see-sawed in a 1.0 bps range around tights after holding narrow range across the board early Friday, rates curves back to bear steepening.

After a very slow start (for spreads at least as rates curves were assailed by renewed bear steepener interest), the front end broke range and gapped tight

US BLS: Three-Quarters of Feb CPI Rise Due to Gasoline


WASHINGTON (MNI) - Outside of the big bump-up from gasoline -- which threatens to repeat in the next CPI -- the counter currents within the February inflation report kept the increases very modest.

Germany 2012 Fed Net Borrow To Be Raised To E34.8 Bln; Source


BERLIN (MNI) - The German Finance Ministry in its draft for a supplementary budget for this year plans to raise federal net new borrowing in 2012 to E34.8 billion from the previously earmarked E26.1 billion, a senior government official said Friday.

The supplementary budget became necessary because Europe's permanent European bailout fund, the European Stability Mechanism, will be created this year and requires Germany to shoulder E8.687 billion of the financing of the fund in 2012.

In the 2012 supplementary budget draft, expenditures will be raised to E312.7 billion from E306.2 billion in the initial budget bill, the source said. Federal tax revenue is now seen at E249.7 billion (up from E249.2 billion).