insto - Australian financial markets

JPMorgan Chase & Co. has launched a benchmark sized 5 year Australian dollar bond.

The transaction will offer both fixed and floating rate tranches with price guidance as follows:

• Swap +130bps (sa/qrt)
• 3month BBSW +130bps

Pricing is expected on Thursday, 4 March 2010.

The sole lead manager for the deal is JP Morgan Australia, with co-managers ANZ, CBA, NAB and Westpac.

JP Morgan Chase & Co. has an issuer rating of A+ (S&P), Aa3 (Moody’s) and AA- (Fitch).

Global stock indices opened the week on the back foot as risk aversion in the resource and financial sectors retuned. The S&P500 traded down 0.3 per cent while European stocks fell 0.7 per cent. Japanese markets were closed for a public holiday, while the Hong Kong bourse traded down and Shanghai posted a slight gain.

US stocks reached new year highs as economic data supported Fed chairman Ben Bernanke's declaration that the recession is likely to be over.

Speaking at a Q&A session, Bernanke said that the recession has ended from a technical point, helping the S&P to gain 0.31 per cent.

US bonds traded lower on the stronger economic data. The 10yr yield increased 3bps to 3.44 per cent as monthly retail sales rose 2.7 per cent, regional manufacturing improved and producer prices rebounded.

The week was all about earnings - US second quarter corporate earnings. The direction of credit markets were in limbo following weak US employment statistics earlier in the month. The health of America's top companies and particular its largest banks was seen as the next means to assess the state of the global economic recovery.

US Stocks had another positive session on Thursday as JPMorgan posted solid earnings and Dr Doom changed his tune.

The US S&P500 index closed up 0.86 per cent. Bonds also gained as foreclosures data and concerns surrounding CIT led to some ‘safe haven’ buying. The UST 10yr yields fell 6bps to 3.56 per cent.

US stocks made further gains on Wednesday, taking their lead from stronger than expected earnings and improved credit card loan numbers.

Rising yields and higher energy prices weighed on US stock markets overnight.

The S&P500 stock index shed 0.35 per cent after soft demand for a 10yr bond auction drove borrowing costs higher.

US stocks edged higher overnight. The S&P500 index was up 0.35 per cent as energy companies gained on rising commodities prices. 

US Treasuries were lifted after a record US$35b 5yr auction was well bid. Two year US Treasury yields fell 10bps, 10yr yields fell 2bps to 3.86 per cent while 30yr yields were up 4bps to 4.65 per cent. 

Credit indices improved. The US Markit CDX index was 3bps tighter at 124 as ten US banks were approved to repay TARP funding. Financials tightened but other sectors took a breather from the strong rally in credit markets.

Global stock markets posted strong gains on Monday as more investors bet that GM’s bankruptcy is the bottoming of the economy. The S&P500 index gained 2.6 per cent while the Eurofirst 300 index closed 2.7 per cent higher.