High yield tightened last week on the back of strong market technicals as equities set new all-time highs, oil hit a 16-month high, and Lipper reported an inflow of $2.03b into retail funds for the week. The yield to worst on the Bank of America High Yield Index closed at 6.21% vs 6.56% the previous Friday. Issuance gained momentum with 16 deals for $8.875b pricing, making it the busiest week since mid-September. Overnight, oil jumped amid continued efforts to cut production, pushing up the outlook for global inflation and sending the 10-year treasury yield above 2.5% for the first time since October 2014. Markets are pricing in a 100% chance of a rate hike at this week’s Fed meeting.

The Bank of America Merrill Lynch High Yield Index monitors the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market.  Index data sourced from Bloomberg. Yield referenced is the yield-to-worst and spread referenced is the spread-to-worst.