(Bloomberg) -- Earnings season is gearing up again, and that usually means debt issuance from the nation’s largest banks. 

April tends to be the second-highest month for debt sales from the biggest banks, JPMorgan Chase & Co. analysts Kabir Caprihan and Nikita Dyatlov wrote in a client note this week. Typically the U.S. banks, which come out of earnings blackouts starting this Wednesday when JPMorgan reports, sell about 15% of annual issuance in April.

While sales are expected to be brisk, it may be more so than usual, according to the strategists. Rates are probably only going to march higher from here, and borrowers are looking to issue while the cost of funding remains relatively low. 

Credit investors will also likely tune into key inflation data scheduled to be released on Tuesday. Money managers will parse the consumer price index in an effort to better navigate the Federal Reserve’s monetary tightening campaign to fight the highest inflation in 40 years. 

The data is “likely to reinforce the perception that inflation is endemic, the Fed will need to continue to tighten the screws and that will lead to an eventual recession,” said Ken Monaghan, co-head of high-yield at Amundi. “If the Fed was an airline pilot, given its history it would be sent back to the aircraft simulators for its inability to execute a soft landing.”

Investment-grade bond funds notched another weekly outflow of $1.7 billion for the week ended April 6, according to Refinitiv Lipper data. The withdrawals mark the second straight week of exits after money managers pulled $2.55 billion of cash in the prior period. There have been nine weeks of outflows so far this year for the asset class. Junk bonds, meanwhile, posted a second weekly inflow as retail investors waded back into the market.

Sales Pipeline

U.S. high-grade bond sales are expected to be lighter next week, with consensus estimates at $10 billion to $15 billion. That follows a week that saw more than $25 billion price. 

A $985 million junk-bond offering to help fund the buyout of Oldcastle BuildingEnvelope, a building products distribution company, is the lone deal in the high-yield bond pipeline. Early pricing discussions on the secured portion is mid-high 6%, while the riskier unsecured section is being discussed at mid-high 9%.

The U.S. leveraged loan market, meanwhile, is rounding out one of its best weeks in some time, which should bode well for borrowers that need to raise cash to fund buyouts. The floating-rate debt remains in high demand amid a hawkish Federal Reserve. The asset class notched one of its biggest inflows on record. 

Commitments are due on at least five leveraged loan deals next week. 

U.S. bond markets close early on Thursday and will remain closed Friday in observance of the Good Friday holiday.

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