Ryan Horan, IG / HY corporate bond trader at American Century Investments, discusses the challenging liquidity environment traders are facing and how desks should approach this week amid a new wave of bond issuance, a fresh batch of earnings, and the fall in market participation. He also unpacks his bullish views in some potentially undervalued subsectors.
- US equities volumes are low and liquidity looks poor for the year to date. Investment grade volumes are low but spreads are tight.
- In primary equities: There will be several IPOs in Tech on Nasdaq on July 19.
- Data: Retail Sales, July 18. US Housing numbers, July 19. Earnings: BofA, First Alliance, Tesla, Goldman Sachs.
- US axe data, which is within normal ranges, indicates a higher proportion of bids versus asks in credit.
Europe / UK
- Equities volumes are very low yet liquidity is good for the Year to date. Investment grade volumes were at normal ranges but spreads were tight for 2023.
- In primary equities: There will be several IPOs in Tech, Energy, and Healthcare on the London Stock Exchange on July 17 and Consumer Staples on Euronext on July 19.
- Data: UK and EU Inflation Rate and CPI, July 19, and UK Retail Sales, July 21.
- EU axe data, which is within normal ranges, suggests a higher proportion of EU dealer bids Vs asks in credit.
- GBP axe data, within normal ranges, suggests a skew towards net buying Vs selling of credit.