US dollar swap spreads moved out sharply this week. By yesterday (Thursday), the 10 year swap was trading close to 90bp, more than 5bp wider than its closing price on July 10. The five year swap moved out to about 75.6bp mid-market, while the three year was at about 64bp. At the same time, corporate secondary spreads held their ground over the early part of the week and then firmed by about 1bp on Thursday - a day of considerable dollar issuance. Consequently, arbitrage to floating rate has improved appreciably over the course of the week, and underwriters should see some interest in opportunistic debt raising.
July 16, 1999