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The big Wall Street banks are set to start reporting second-quarter earnings that should reveal stronger investment banking revenues, says Moody’s Ratings.

On Friday the large banks, including JPMorgan Chase & Co. Inc., Goldman Sachs Group Inc., Morgan Stanley, Citigroup Inc., Bank of America Corp. and Wells Fargo & Co., begin releasing their latest quarterly results.

In a new report, the rating agency said it’s anticipating improved investment banking results compared with the same quarter last year, amid strong debt underwriting, robust merger-and-acquisition activity, and higher trading volumes.

“Debt issuance volume systemwide was higher than a year ago, with the largest increases in high yield,” it said, while, for equities, secondary offerings were flat, and initial public offerings were down slightly from last year.

“High-yield debt issuance volumes were up significantly from a year ago, building on momentum over the last 12 months that likely reflected tighter credit spreads, more clarity around monetary policy and a better-than-expected economic outlook,” Moody’s said in the report.

Completed merger-and-acquisition deals were higher both quarter over quarter, and year over year, it said.

Trading volume also rose strongly from last year, the report said, although it noted that “lower volatility could limit profitable trading opportunities.”

In equities, volumes in both cash and derivatives trading “were robust,” the report said, “but low equity market–implied volatility persisted.”

“Volatility and [trading] spreads are generally positively correlated and can boost revenue for banks that are able to navigate the markets and provide liquidity,” the report noted.

The latest data suggest that, while spreads have widened, volatility has dropped, which Moody’s said sends mixed signals about the banks’ likely second-quarter equity trading revenue.

“Based on these indicators, we do not expect material growth in Q2 equities trading revenue from a year ago,” it said. However, it noted that the data on volatility may be “driven by a handful of stocks and, as such, may be a weak signal of likely trading revenue.”

On the fixed-income side, trading volumes in credit ETFs and in fixed income, currencies and commodities (FICC) derivatives “were elevated, but implied volatility in investment-grade and high-yield credit markets was still at multi-year lows,” it said.

Overall, Moody’s said it expects FICC sales and trading revenue for the second quarter to be similar year over year.

“However, the significant increase in primary issuance volumes could boost secondary trading volumes and drive interest rate hedging activity,” it said.