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Bond Market News
ISM Manufacturing Jumps to 40-Month High
February 3, 2026
US Treasury yields rose by 2-4bp across the curve. The ISM Manufacturing Index surged to 52.6 in January, jumping from 47.9, hitting a 40-month high. This was also its first reading in expansionary territory since February 2025. Among the sub-components, the Price Paid Index came in at 59.0 vs. expectations of 59.3. Besides, the New Orders and Production sub-components also rose, helping push the index higher.
Looking at US equity markets, the S&P and Nasdaq ended 0.5-0.6% higher. US IG CDS spreads tightened by 3.1bp while HY CDS spreads were 3.1bp tighter. European equity indices ended higher. The iTraxx Main CDS spreads were 3.3bp tighter and the Crossover CDS spreads were 4.4bp tighter. Asian equity markets have opened in the green this morning. Asia ex-Japan CDS spreads tightened by 1bp.
New Bond Issues
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SMFG $ 6NC5 bond at T+95bp area
Oracle raised $25bn via an eight-trancher.
The senior unsecured bonds are rated Baa2/BBB/BBB. Proceeds will be used for general corporate purposes, which may include capex, repaying debt, future investments or acquisitions and payment of cash dividends or share repurchases.
GE Vernova raised $2.6bn via a three-trancher. It raised:
- $600mn via a 5Y bond at a yield of 4.287%, 30bp inside initial guidance of T+75bp area.
- $1bn via a 10Y bond at a yield of 4.929%, 30bp inside initial guidance of T+95bp area.
- $1bn via a 30Y bond at a yield of 5.693%, 32bp inside initial guidance of T+110bp area.
The senior unsecured notes are unrated. Proceeds will be used for general corporate purposes, including financing a portion of the acquisition of the remaining 50% stake of Prolec GE.
Rating Changes
- Royal Caribbean Cruises Ltd. Upgraded To ‘BBB’ On Favorable Bookings And Expected Deleveraging; Outlook Stable
- Moody’s Ratings upgrades Twilio to Ba1
- Comerica Inc. Upgraded To ‘BBB+’ On Acquisition By Fifth Third Bancorp; Ratings Subsequently Withdrawn
- SM Energy Co. Upgraded To ‘BB’ Following Merger With Civitas, Outlook Stable; Ratings Removed From CreditWatch Positive
- Fitch Downgrades CSN’s IDRs to ‘BB-‘; Places on RWN; Removes from Under Criteria ObservationFitch Revises Telenet’s Outlook to Negative; Affirms Rating at ‘BB-‘Fitch Revises Concentrix’s Outlook to Negative; Affirms IDR at ‘BBB’
Term of the Day: PMI
PMIs or Purchasing Managers’ Index are an index composed of a monthly survey of purchasing managers/supply chain managers across industries. This is a diffusion index, a statistical measure of summarizing the common tendency of a series – if there are more number of values rising than falling, the index is above 50 and the index goes below 50 if the falling values exceed those rising. For PMIs, a value below 50 indicates contraction and a value above 50 shows expansion. These surveys are taken over different areas of the supply chain business: New Orders, Employment, Inventories, Supplier Deliveries and Production covering imports, exports, prices and backlogs. In most countries, Markit publishes the PMI numbers while other organizations publish them too. Markit generally publishes the month’s PMIs in last week of the month.
Talking Heads
On Foreign Buyers Scooping Up US Credit at Fastest Pace in Three Years
Nathaniel Rosenbaum and Silvi Mantri, JPMorgan Strategists
“Despite the concerns that a falling dollar is a sign of foreign investors selling US dollar securities, what we are seeing in credit so far seems to suggest the exact opposite, with renewed very strong buying from Asia to start the year”
On Investors flock to gold, gold miner ETFs in January in bid for safety – JPMorgan Analysts
“We remain firmly bullishly convicted in gold over the medium-term on the back of a clean, structural, continued diversification trend that has further to run amid a still well-entrenched regime of real asset outperformance vs paper assets”
On Greater Treasury Volatility Under Warsh Fed – Morgan Stanley
“Warsh didn’t like to keep the market beholden to the Fed’s view… he won’t necessarily reinforce the markets’ view if it differs from his… The potential for more monetary policy surprises and less consensus among investors about its future path should raise realized volatility”
Top Gainers and Losers- 03-Feb-26*
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