Morning Commentary: Liquidity thin ahead of holiday; small buying from ETFs; funds see outflows

By Paul A. Harris

Portland, Ore., Dec. 23 – Liquidity in the high-yield bond market remained extremely thin on Wednesday morning, with essentially no two-sided trading taking place, according to a trader based on the East Coast of the United States.

High-yield ETFs were small buyers, as they were on Tuesday, the source added.

ETFs were higher heading into the mid-morning.

The iShares iBoxx $ High Yield Corporate Bd (HYG) was up 48 cents, or 0.60%, at $80.72 per share. The SPDR Barclays High Yield Bond ETF (JNK) was better by 17 cents, or 0.49%, at $34.02 per share.

The cash flows of the dedicated high-yield funds were negative on Tuesday, the trader said.

The ETFs saw $180 million of outflows on the day.

Actively managed funds sustained $175 million of outflows on Tuesday.

The Tuesday cash flows of the dedicated bank loan funds were also substantially negative, at $340 million of outflows.

The primary market remained shuttered on Wednesday and will almost certainly remain that way until the new year, the trader said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.