Municipal New Issuance: Last week’s negotiated calendar totaled to just over $5.5 billion for the week with the largest deal of the week being the $1.29 billion Metropolitan Transportation Authority issuance which AmeriVet participated in the Selling-Group. This was the first time that the MTA sold fixed-rate transportation revenue bonds since February 2021. The next largest deal of the week was the New York City Municipal Water Finance Authority which issued $722 million. The New York City Municipal Water Finance Authority repriced it’s bonds with lower yields than the original pricing. The New Jersey Turnpike Authority also issued $500 million.

Municipal Secondary Trading: Secondary trading for the week totaled to over $36.19 billion with 51% of the trades being dealer sells. According to Bloomberg, clients put up roughly $6.9 billion up for the bid with Friday having the largest amount of bids-wanted with $1.74 billion up for the bid.

Municipal Spreads: Last week, muni yields rose for the first time in six weeks this past week with yields on 10-year notes rising by 3.1 basis points to 2.48% with the average yield across the curve rising by 2.2 basis points during the six-week period. With the rise in yields this past week, munis underperformed Treasuries with 10-year munis now yielding 58.96% of Treasuries, compared to the prior week when the ratio was at 56.90%. We did see the muni curve flatten this past week by 4.1 basis points to end the week at 80 basis points.

According the LSEG Lipper Global Fund Flows data, municipal bond mutual funds continue to see inflows as investors added roughly $64 million to municipal bonds funds last week This follows last week’s inflow of $300 million and marks the fifth straight weeks of inflows.

After hitting a four year low on Monday, the 10-year ratio did rise by 2.06 percentage points by Friday. Although we did see munis cheapen on a relative value basis to Treasuries, we are still in rich territory as we are still well below the 10-year average for 10-year notes which is roughly 87.48%. There isn’t much that is fundamentally different with munis compared to a few weeks ago as demand continues to grow. We should expect to see munis underperform Treasuries as a result of the increase in supply this week.

Municipal Supply: This week, the negotiated calendar will have an expected volume of $8.69 billion with the three largest deals taking up almost 60% of the calendar. AmeriVet will be in the Selling-Group for the two largest deals for the week which will be the $2.67 billion State of California GO issue and the $1.45 billion City of New York issuance. The third largest deal of the week will be the $1.8 billion State of Washington issuance. Currently, supply is roughly 32% higher than last year.