-The Bloomberg IG Index ended the week +1bp wider on the index. Notably hyperscaler issuance took a breather so we saw some outperformance from the sector. Overall spreads continue to remain historically tight given the high overall yield level.
-Supply came in on the higher end of expectations for the week with $56bn printing (higher than dealer estimates) and pushing us to a higher than expected, and higher than usual August, despite many traders heading on their mandatory 2-weekers. Supply estimates range high and low for next week with the middle of the range expectations of roughly $25bn. Next week in the AI related space a new data center related deal is expected to price in the IG bond markets.
-Yields ended the week higher and steeper despite the lower than expected CPI/PPI data. The data pointed to less need for a hike at the September Fed. However, as the spat with Iran continued the relief rally in rates did not last long. To close out the week, weak retail sales data on Friday did not help stop this sell-off.
Chart of the week:
The Fed under Warsh has room to to delay rate cuts as inflation remains cooperative, but yet rates are reaching uncomfortable levels. If they continue at this pace equity market valuations may no longer make sense. Either that or something breaks again and we get a repeat of the mini volatility episodes we’ve seen the past few years (UK LDIs, regional banks, etc).
🗓️ Upcoming Economic Data
Monday, 17 August 2026
• US Empire Manufacturing (Aug).
• US Net Long-term TIC Flows (Jun).
• US Total Net TIC Flows (Jun).
• US NAHB Housing Market Index (Aug).
Tuesday, 18 August 2026
• US Housing Starts (Jul).
• US Building Permits (Jul P).
• US Industrial Production MoM (Jul).
• US Capacity Utilization (Jul).
• US Import Price Index MoM (Jul).
• US Pending Home Sales MoM (Jul).
• US Treasury Buyback: $2 bn of 20Y to 30Y Nominal Coupons for Liquidity Support.
Wednesday, 19 August 2026
• Fed: FOMC Meeting Minutes (July 29 meeting).
• US MBA Mortgage Applications.
• US Treasury: 20-Year Bond auction (size announced 13 Aug; issue 31 Aug).
Thursday, 20 August 2026
• US Initial Jobless Claims (w/e Aug 15).
• US Continuing Claims (w/e Aug 8).
• US Philadelphia Fed Business Outlook (Aug).
• US Leading Index (Jul).
• US Treasury: 30-Year TIPS Reopening (29-Year 6-Month; size announced 13 Aug; issue 31 Aug).
• US Treasury Buyback: $4 bn of 3Y to 5Y Nominal Coupons for Liquidity Support
Friday, 21 August 2026
• US S&P Global Manufacturing PMI (Aug P).
• US S&P Global Services / Composite PMIs (Aug P).
• Bloomberg August United States Economic Survey
Next week’s economic calendar remains light, with key upcoming risk events including PCE data and Jackson Hole the following week.
Questions? Comments? Feel free to shoot over an email to [email protected].