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Bond Market News
ISM Services Hits Its Highest Since 2022; ADP Private Payrolls Rise
March 5, 2026
US Treasury yields climbed higher again by 4-5bp across the curve. The ISM Services PMI for February came in at 56.1, its highest level since mid-2022, beating expectations of 53.5. Separately, the ADP Private Payrolls report showed an increase of 63k jobs in February, beating expectations of 50k.
Looking at US equity markets, the S&P and Nasdaq ended higher by 0.8% and 1.3% respectively. US IG CDS spreads tightened by 1.9bp and HY CDS spreads were 6.7bp tighter. European equity indices ended higher too. The iTraxx Main CDS spreads were 2bp tighter and the Crossover CDS spreads were 9.6bp tighter. Asian equity markets have opened in the green this morning. Asia ex-Japan CDS spreads widened by 0.4bp.
New Bond Issues
- Industrial Bank (HK Branch) $ 3Y FRN at SOFR+100bp area
Rating Changes
- Kirby Corp. Upgraded To ‘BBB+’ From ‘BBB’ On Continued Strong Credit Metrics; Outlook Stable
- Meituan Downgraded To ‘BBB+’ With Negative Outlook Due To Harsher Competitive Dynamics
- Fitch Revises Indonesia’s Outlook to Negative; Affirms at ‘BBB’
- Outlook On SoftBank Corp. Revised To Negative Following Similar Action On Parent; ‘BBB’ Rating Affirmed
Term of the Day: Crossover CDS Spreads
The iTraxx Crossover Index is a credit default swap (CDS) based index compiled by IHS Markit (now part of S&P Global) which consists of the 75 most liquid sub-investment grade entities in Europe. The index helps track credit risk in the European high yield market, akin to the Markit HY CDS Index in the US. Performance is tracked in terms of the index’s value and the move in the spreads of the index. A tightening (a move lower) in its CDS spreads implies an easing of credit conditions in the European junk-bond markets which leads to an increase in the value of the index. On the other hand, a widening in its spread (a move higher) implies a worsening in credit conditions, which would lead to a fall in the index’s value. While the iTraxx Crossover Index helps track European high yield spreads, the iTraxx Main index helps track European investment grade spreads. The iTraxx Main index consists of 125 of the most liquid European entities with IG-ratings as published by Markit from time to time.
Talking Heads
On Wanting Rate Cuts Despite Iran War – Stephen Miran, Fed Governor
“I believe it’s appropriate to continue acting… evidence from events over the weekend hasn’t led me to change any of my forecasts for the labor market, for inflation”
On African Dollar Bonds Recovering Amid Investor Anxiety Over Iran
David Austerweil, VanEck
“We think the uncertainty around Iran will continue for some time, but we look to add to African dollar bonds on future bouts of weakness… We’re opportunistic so will look at what has sold off most at any given moment”
Leo Morawiecki, Aberdeen Plc
“Its a very uncertain time and its hard to see investors piling into high-yield new issues right now”
On Euro Potentially Strengthening With Bigger Global Role – Pierre Wunsch, ECB GC Member
“If we want a greater role for the euro, we might have a further appreciation… What is more important, though, than joint financing is that we consolidate the defense industry in Europe — and of course, we see it’s difficult “
Top Gainers and Losers- 05-Mar-26*
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