US Research Quarterly, 2012 Q3

December 6, 2012

US Research Quarterly, 2012 Q3

About the Report

A quarterly report containing brief commentary and statistics on the U.S. capital markets, including but not limited to: municipal debt, U.S. Treasury and agency debt, short-term funding and money market debt, mortgage-related, asset-backed and CDO debt; corporate bonds, equity and other, derivatives, and the primary loan market.


Total Issuance Rose in Third Quarter 2012 

Securities issuance totaled $1.68 trillion in the second quarter of 2012, a 6.3 percent decrease quarter-over-quarter (q-o-q) but a 10.1 percent increase year-over-year (y-o-y).

Securities issuance totaled $1.85 trillion in the third quarter of 2012, a 7.9 percent increase quarter-over-quarter (q-o-q) and a 24.9 percent increase year-over-year (y-o-y).

During the September FOMC meeting, the Fed indicated that economic activity continued to increase at a moderate pace in recent months; employment rose slowly; and the unemployment rate remained elevated. Consumer price inflation remained subdued, while measures of long-run inflation expectations stayed stable. The Fed decided to keep the target Fed Funds rate at 0 - 0.25 percent and anticipated such exceptionally low levels in the target rate to be warranted at least through mid-2015.

On September 13, Federal Reserve Chairman Ben Bernanke announced the open-ended third round of quantitative easing ("QE3"), planning to buy $40 billion in agency MBS every month until the U.S. economic outlook improved substantially, as long as inflation remains contained. The Federal Reserve also announced the continuation of the 'Operation Twist' program through December 2012.

The equity markets increased slightly in the third quarter of 2012. The S&P 500 closed the third quarter at 1,440.67, a 5.8 percent increase from last quarter and 27.3 percent up y-o-y. The NASDAQ Composite Index ended the third quarter at 3,116.23, a 6.2 percent gain from 2Q'12 and 29.0 percent increase y-o-y. The Dow Jones Industrial Average (DJIA) increased as well, finishing 3Q'12 at 13,437.13, a 4.3 percent gain q-o-q and 23.1 percent gain y-o-y.

Total gross issuance of Treasury bills and coupons, including cash management bills (CMBs), was $1.92 trillion in 3Q'12, a 7.0 percent increase from the $1.80 trillion issued in 2Q'12 and a 5.4 percent increase from 3Q'11's issuance of $1.82 trillion. Total third quarter net issuance of U.S. Treasury securities, including CMBs, increased to $232.0 billion, up 44.2 percent from the previous quarter's $160.9 billion but 1.0 percent below the $234.3 billion issued in 3Q'11.

Federal agency long-term debt issuance was virtually unchanged at $176.0 billion in the third quarter compared to $175.8 billion in 2Q'12, , but was a 32.4 percent decline y-o-y.

Long-term municipal issuance volume, including taxable and tax-exempt issuance, totaled $83.6 billion in the third quarter of 2012, a decline of 26.9 percent q-o-q ($113.4 billion) but an increase of 11.9 percent y-o-y ($74.7 billion).

Issuance of mortgage-related securities, including agency- and non-agency pass-throughs and collateralized mortgage obligations, totaled $540.7 billion in the third quarter of 2012, a 14.7 percent and 49.5 percent increase, respectively, from 2Q'12 ($471.1 billion) and 3Q'11 ($361.5 billion).

Asset-backed securities issuance totaled $51.2 billion in the third quarter of 2012, a decline of 5.9 percent from 2Q'12 ($54.4 billion) but a 91.7 percent increase from 3Q'11 ($26.7 billion).

Total corporate bond issuance totaled $342.5 billion in 3Q'12, 43.9 percent above the $238.0 billion issued last quarter and almost double the $180.1 issued in 3Q'11.


SIFMA Research 

  • Managing Director, Director of Research: Kyle Brandon
  • Vice President, Director of Statistics: Charles Bartlett
  • Director: Sharon Sung
  • Analyst: Justyna Podziemska

SIFMA Capital Markets 

  • Manager: Joseph Cox
  • Manager: Timothy Cummings
  • Manager: Craig Griffith


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The Securities Industry and Financial Markets Association (SIFMA) prepared this material for informational purposes only. SIFMA obtained this information from multiple sources believed to be reliable as of the date of publication; SIFMA, however, makes no representations as to the accuracy or completeness of such third party information. SIFMA has no obligation to update, modify or amend this information or to otherwise notify a reader thereof in the event that any such information becomes outdated, inaccurate, or incomplete.


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