After several of the largest U.S. banks issued large amounts of $55 billion in bonds, the market focus turned to investment-grade borrowers who announced their results this week. As heavyweights in industries such as technology, industry, medical and consumer goods have released

After several of the largest U.S. banks issued large amounts of $55 billion in bonds, the market focus turned to investment-grade borrowers who announced their results this week. As heavyweights in industries such as technology, industry, medical and consumer goods have released their financial reports and become potential borrowers, the loan size is about $25 billion, according to preliminary estimates from the senior syndicated trading department.

But companies as bond issuers may have to beautify transactions to attract buyers who are scared by tougher remarks from the Federal Reserve and the European Central Bank. Investors drew $3.59 billion from investment-grade U.S. corporate bond funds in the week ended April 20, the third largest outflow of funds in the market this year. Meanwhile, a key measure of corporate credit risk climbed to its highest level since June 2020 last Friday.

Citigroup and Goldman Sachs have not issued bonds after announcing their first-quarter results. The two major Wall Street banks may also consider entering the high-rated bond market. When it comes to financing, banks are often able to take advantage of cheap yields very quickly, and other companies tend to follow suit. "While some banks may expect the Fed to bring a soft landing in multiple interest rate hikes, banks are actively issuing bonds before multiple interest rate hikes of 50-75 basis points, which may be a signal that 'focus on what we do, not what we say'," said Bloomberg analyst Arnold Kakuda. "In his opinion, Goldman Sachs is more likely to issue bonds than Citigroup, as Citigroup has completed $14 billion in bond issuance so far this year, compared with the previously expected overall bond issuance scale of $15-20 billion in 2022.

Investment-grade borrowers that will announce quarterly results this week include Google's parent company Alphabet (GOOG.US), Amazon (AMZN.US), Apple (AAPL.US), Caterpillar (CAT.US, General Motors (GM.US), Coca-Cola (KO.US) and ExxonMobil (XOM.US).

Updated in the high-risk bond market

The U.S. speculative corporate bond market is also under pressure. Data compiled by Bloomberg showed that the issuance scale last week was only $900 million, and this month it was slightly higher than it reached more than $6 billion. This is the slowest April since 2008. Investors have withdrawn from high-yield bond funds for the second consecutive week, and junk bonds will also hit the longest consecutive decline in more than two months.

Brad, head of Barclays fixed income research department, head of Barclays fixed income research department Rogoff wrote that rising interest rates will limit sales of high-yield bonds in 2022 to $240 billion to $260 billion, down nearly 62% from previous forecasts; earlier, Citi lowered its forecast by more than a third to $250 billion, and Goldman Sachs lowered its forecast by $100 billion. The decline in investment-grade bond issuance provides better credit protection for holders who have purchased bond issuances.

The U.S. leveraged loan market has 10 new bond issuances this week, and the overall tone of the market remains risk appetite. Market demand is strong, and funds invested in this asset class have attracted money for the fifth consecutive week.

According to Bloomberg, the Federal Reserve now seems to realize that they are already well behind the economic yield curve and may raise interest rates by 50 basis points at their May meeting. Bloomberg economists led by Wong are writing that despite a lot of recent recession, economic fundamentals remain strong, but the first-quarter U.S. GDP data scheduled for Thursday may not reflect that.