Municipal New Issuance: For the second week of February, the negotiated calendar had a total volume of about $10.6 billion with the largest deal of the week being the New York City Transitional Finance Authority’s Future Tax Secured Subordinated Bonds issuance which featured approximately $1.7 billion in tax-exempt bonds and $247 million in taxable bonds. Notably, AmeriVet participated as a Selling-Group-Member for the NYCTFA. The second largest deal of last week was the $1.2 billion Public Energy Authority of Kentucky Gas Supply Revenue Refunding Bonds issuance. AmeriVet participated as a Selling-Group-Member for several other issues this past week such as the Florida Housing Finance Corporation’s Homeowner Mortgage Revenue Bonds issuance which featured $75 million in taxable bonds and $75 million tax-exempt bonds, the New Mexico Finance Authority which issued $99 million for their Public Project Revolving Fund (Senior Lien), Connecticut Housing Finance Authority which issued $73 million in taxable bonds and $47 million in tax-exempt bonds, and the Maryland Community Development Administration which issued $174 million in taxable bonds and $75 million in tax-exempt bonds. Currently, issuance year-to-date stands at $50.74 billion, an increase of approximately 12.5% year-over-year.

Municipal Secondary Trading:  Secondary trading for the week totaled to over $38 billion with 54% of all secondary trading being dealer sells and the bulk of the secondary trading volume being executed on Wednesday. According to Bloomberg, clients put roughly $5.84 billion up for the bid, a slight increase from the prior week’s bids-wanted volume of $5.63 billion.

Municipal Spreads: The second week of February saw a complete 180° from the prior week as muni yields rose by an average of 4.3 basis points across the cure with yields on 10-year notes rising by 4 basis points to end the week at 3.00%. With yields rising, munis did underperform versus Treasuries as the 10-year muni-to-Treasury ratio is now yielding 67.18%, compared to the prior week when the ratio was yielding 66.01%. We did see the muni curve steepen slightly this past week with the curve steepening by 7.2 basis points to 132 basis points.

According the LSEG Lipper Global Funds Flow data, muni bond funds added roughly $239 million over the past week which marks the fourth consecutive week on inflows and follows the prior week’s inflows of $1.1 billion.

With CPI coming in hotter than expected, munis, as well as other fixed income products, saw yields rise across the curve as the recent data could indicate that the Fed may hold off cutting rates later this year. Prior to the release of the CPI report, munis returns for the month were up roughly .33%, however, once inflation numbers were released, muni yields were sent higher bringing returns into the red for the month before Friday’s rally which brought returns back up to .21% for the month and year-to-date returns to .71%. With the threat of tariffs from the Trump administration looming, inflation could be pushed even higher this year.

Municipal Supply: With the holiday shortened week due to the Presidents Day holiday yesterday, the negotiated calendar will have an expected volume of about $4.1 billion with the largest deals being the $500 million Pennsylvania Economic Development Financing Authority taxable Revenue Bonds issuance (Economic Development and Infrastructure Programs) followed by the Miami-Dade County’s Airport Revenue Bonds issuance which will consist of $335 million in tax-exempt bonds and $190 million in taxable bonds.