Global credit traded either side of unchanged as dovish Fed commentary balanced out tensions between the US and Iran. US financials outperformed this week as underwhelming supply post-earnings blackout created a technical bid for secondary paper. From an earnings standpoint, results were mostly neutral although issuance was limited to Thursday with Bank of America and Morgan Stanley printing a total of $4.5bn in the US while JPMorgan printed €1.5bn in the Euro market. Energy credit underperformed as WTI sold off by over 8% throughout the week. The fluctuations in WTI were the result of stockpile speculation and threats between the US and Iran.
Canadian credit outperformed with autos and consumer retail names tightening by 2-4 bp. On the data front, retail sales missed expectations of 0.4%, primarily attributed to poor weather. The Canadian 5-year government bond yield fell by 13 bp for the week as dovish commentary, and soft macro data crept into rate expectations. The Canadian primary market proved to be active with four issuers printing a total of $2.35bn. RBC issued $1.5bn of subordinated debt in the largest bond deal of the month so far. The 10NC5 bond printed at +132 and traded up to 3bp tighter on the break as investors continue to chase for yield.