Municipal New Issuance: With just four trading days due to the MLK Holiday this past week, the negotiated calendar totaled to just over $7.39 billion with the largest deal of the week being the $1.5 billion University of California Regents issue, followed by the $428 million Portland Oregon Sewer Systems issue. As a Selling-Group-Member, AmeriVet participated on the $541 million Massachusetts Clean Water Trust issue and the $300 million Connecticut Housing Finance Authority which issued $200 million in taxable bonds and $100 million tax-exempt bonds.

Municipal Secondary Trading: Secondary trading for the week totaled to over $34.96 billion with 51% of all secondary trades being dealer sells. According to Bloomberg data, clients’ bids-wanted were elevated for the week as they put up approximately $5.42 billion up for the bid which is a decrease from prior week’s total of $6.88 billion.

Municipal Spreads: Muni yields rallied once again this past week as muni yields fell by an average of 3.8 basis points across the curve with yields on maturities 10 years and in seeing the most significant bumps by an average of 5.1 basis points and the long end just seeing bumps of about 2.4 basis points. We did see 10-year yields fall by 5.1 basis points to end the week at 3.14%. With muni yields falling this past week, munis were able to outperform Treasuries with the 10-year muni-to-Treasury ratio now yielding 67.96%, compared to the prior week when the ratio was at 68.97%. With the front end seeing the most bumps this past week, the muni curve did steepen by 2.6 basis points to end the week at 124 basis points.

Inflows returned this past week according to LSEG Lipper US Fund flows data as investors added approximately $2 billion to muni bond funds. This follows the prior weeks’ outflow of $251 million from those funds.

With munis seeing bumps across the curve this past week, returns for the month moved to just about even with returns being -.05%. The front end of the muni curve continues to strongest returns of about .28% while the long end continues to struggle out of the gate with losses of about .61% just 24 days into 2025. Although the long end of the curve is still in the red, we are seeing strides in the right direction as the long end saw losses of .79% last week and now has losses of .61%. This is positive news as it looked like we would in the red to start off the year as January is usually a strong month due to low supply and increases in debt payments. We are in interesting pocket of time as higher yields have garnered strong interest as yields touched their highest point since November 2023, most in particularly in yields on 10-year munis which saw their yields hit a high of 3.28 earlier this month. With the higher yields overall, munis buyers continue to overlook the relative richness in the front end of the curve as muni returns continue to outpace Treasuries in the front end. 30-year muni-to-Treasury ratios have cheapened since the start of the year which could entice buyers to go further out in the curve and bring the long end back into positive territory.

Municipal Supply: The negotiated calendar for the week will have an expected volume of just over $5.63 billion with the largest deals of the week being the $1.2 billion Oklahoma Turnpike Authority, followed by the $1 billion Columbus Regional Airport Authority issue for the John Glenn Columbus International Airport.