For global credits, last week started quietly with most players preferring to stay on the sidelines ahead of the Federal Open Market Committee (FOMC) meeting. The exception to this was the newly issued SMPH 30s which saw considerable demand after the issue date. From an issue price of 99.806 and issue spread of 120 basis points (bps), it traded up to 100.80 despite the move higher in US Treasury yields. This meant the spread tightened to as low as +94 bps in a few days, tighter than the +100 bps we estimated in our trade plan. Elsewhere, after the US Fed cut 25 bps as expected and adjusted the dots lower, players seemed more comfortable adding risk positions. ROP and Philly Corp names outperformed while INDON related names underperformed despite headlines about new stimulus and new laws to try to appease protestors.

• The US Retail Sales Advance month-on-month came in higher than expected at 0.6 vs 0.2 in a Bloomberg Survey
• The US FOMC cuts its policy to 4.25% from 4.5% in-line with Bloomberg Consensus.
• The US Initial Jobless Claims week-on-week came in lower than expected at 231,000 vs 240,000 in a Bloomberg Survey.