JPM Daily Credit Strategy Update: Despite heavy issuance this August, secondary trading still tracking lower as typical in August; FAB index modestly off its 1yr+ high with JPY hedging costs at 4yr lows

Research evidence excerpt

J.P. Morgan Securities LLC

Nathaniel Rosenbaum, CFA AC

(1-212) 834-2370

North America Credit Research

11 August 2026

JPMORGAN

JPM Daily Credit Strategy Update

Despite heavy issuance this August, secondary trading still tracking lower as typical in

August; FAB index modestly off its 1y+ high with JPY hedging costs at 4yr lows

Primary issuance remains heavy so far in August, with another $26bn yesterday, only the 3rd time ever we’ve seen a >$25bn day

in August. However, this continued surge in primary markets isn’t filtering through to secondary trading activity nearly as much

anymore. Case in point, US IG issuers priced $78bn last week, 71% above the YTD weekly average of $45.5bn and the thirdlargest issuance week of 2026. Secondary activity, however, was noticeably softer, with average daily trading volume of $43.9bn/

day last week, 4.6% below the YTD average of $46.0bn/day. The divergence is consistent with typical August seasonality:

between 2022-2025, August trading volumes averaged 11.4% below the respective full-year average, and were 4.3% lower than

July levels on average as liquidity tends to thin with many market participants on vacation. This doesn’t appear to be impeding

new issue outperformance so far, with bonds issued over the last 10 days 5bp tighter than the index on average but this dynamic

could start to impede performance a little more as we get to the back half of August where secondary market illiquidity tends to

be even more pronounced. Along these lines, we note that dealer inventories have already significantly increased over the past

week to ~1yr highs, with notably dealers net buyers of $4.6bn of risk yesterday, the most since June 15th and the 7th most this

year (details in Table 1 below).

Figure 1: The surge in primary volume isn’t being met with a corresponding surge in secondary trading

120

Weekly issuance ($bn), lhs

Avg daily trading volume ($bn), rhs

100

60

55

80

50

60

45

40

35

1/5

1/12

1/20

1/26

2/2

2/9

2/17

2/23

3/2

3/9

3/16

3/23

3/30

4/6

4/13

4/20

4/27

5/4

5/11

5/18

5/26

6/1

6/8

6/15

6/22

6/29

7/6

7/13

7/20

7/27

8/3

20

Source: J.P. Morgan; TRACE; Dealogic

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