Municipal New Issuance: For the fourth week of July, the negotiated calendar totaled to just over $10 billion. The largest deal of last week was the Texas Transportation Commission for the Central Texas Turnpike System which issued $1.6 billion. The next largest deal was the $1.3 billion South Carolina Public Service Authority. Last week, AmeriVet served as a Co-Manager for the Metropolitan Pier and Exposition Authority which issued approximately $148 million in Refunding bonds for for the McCormick Place Expansion Project.

Municipal Secondary Trading: Last week, secondary trading totaled to approximately $37.32 billion with 52% of trades being dealer sells. After a quiet week of clients bids-wanted from the prior week, clients put up about $6.23 billion with Wednesday have the largest volume of bids-wanted of $1.5 billion according to Bloomberg data.

Municipal Spreads: Munis improved once again this week as yields on 10-year munis fell by 2.2 basis points this past week to 2.78%. Although we did see yields fall this past week, munis did underperform compared to Treasuries as 10-year munis are now yielding 66.35% compared to a week ago when the ratio was at 66.13%. With the yields falling, we did see the muni curve steepen by 2.9 basis points this past week to 85 basis points.

According to LSEG Lipper Global Fund flows data, investors continued to add to muni bond funds as this past week, investors added about $866 million to muni bond funds. This follows the prior weeks inflows of $906 million.

Munis continue to rally as yields have fallen an average of 15 basis points across the curve. Despite this rally, we continue to see yields higher on the year. Currently, 10-year munis are at 2.78, at the start of the year 10-year munis were yielding 2.28%. Despite this rally, we are continuing to see munis richen compared to Treasuries as the 10-year ratio is currently yielding 66.13%. Munis are still cheaper compared to Treasuries as the 10-year ratio was at 58.48% at the start of the year but still remain rich overall as the 10-year average is 86.50%. With some Fed-friendly numbers coming in last week indicating that inflation is easing, we should expect to hear Fed Chair Powell mention a rate cute which could come as early as September of this year. With this, we could expect to see ratios fall closer to levels we saw back at the start of the year and possibly see yields return back to January levels. If the Fed cuts rates in September, we should expect to see issuers flock back to the markets.

Municipal Supply: For the last week of July, the negotiated calendar will have an expected volume of just over $5.8 billion with the largest deal of the week being the $1.1 billion City of New York General Obligation bonds issue which AmeriVet will be participating in the Selling-Group. The net largest deals of this week will be the Port of Seattle which will issue $822 million and the Port of Portland International Airport which is expected to issue $592 million. Currently muni tax-exempt sales are up almost 36% from the same time last year and we should continue to see sales increase as we wait for the Fed to cut rates.