The first full week of 2020 proved both busy and constructive for global credit markets. Despite heightened geopolitical tension in the middle east, corporate new issues were fast out of the gate with over $60 billion printed across 40 issuers in what proved to be the second-largest week of US dollar supply on record. The issuance was dominated by European and Asian financial sector borrowers, including names like Standard Chartered, BNP and Westpac. Of note, Japanese bank Nomura brought their inaugural Yankee deal with much fanfare, printing $3 billion across 5 and 10-year tranches. The 10-year tranche tightened by up to 11 basis points in early trading as significant buyers all corners of the world stepped in. Despite the substantial supply, US spreads still managed to finish 3-5bp tighter, as the market easily absorbed the supply. Government bonds in Europe continue to unwind from negative rates with yields at a six-month high, while Treasury yields remain in the middle of the 1.70-1.95% range which has prevailed since early October.
New bond issuance was significantly more muted here in Canada as just two deals came to market. Both priced right in line with secondaries but still managed to trade well as investors scrambled to add credit duration. Overall Canadian credits shrugged off middle-east tensions to finish the week 2-3 basis tighter.