Municipal New Issuance: For the second week of June, the negotiated calendar had a total volume of just over $13.52 billion with the largest deals of the week being the California Community Choice Financing Authority which issued $1 billion in Clean Energy Project Revenue Bonds. Additionally, the Private Colleges and Universities Authority issued $862 million this past week for Emory University. AmeriVet served as a Co-Manager for the Pennsylvania Housing Finance Agency’s Single-Family Mortgage Revenue Bonds transaction which issued $510 million in tax-exempt bonds and $68 million in taxable bonds, as well as the Wisconsin Housing and Economic Development Authority’s Home Ownership Revenue Bonds transaction consisting of $95 million in tax-exempt bonds and $50 million in taxable bonds. AmeriVet also participated in the $381 million New York City Housing Development Corporation Multi-Family Housing Revenue Bonds transaction as a Selling-Group-Member.

Municipal Secondary Trading: Secondary trading volume totaled to just over $48.41 billion last week with 52% of secondary trading being dealer sells. According to Bloomberg, clients put roughly $6.86 billion up for the bid, down from the prior week’s total of $5.96 billion.

Municipal Spreads: Muni yields fell across the curve with an average bumping by about 2.9 basis points across the curve with 10-year notes seeing a 2.9 basis point bump to end the week at 3.29%. Despite yields falling this past week, munis did lag versus Treasuries with the 10-year ratio now yielding 75.55%, compared to the prior week when the muni-to-Treasury ratio was at 75.48%. We did see a slight steepening of the yield curve by .1 basis points to 183 basis points.

According to LSEG Lipper Global US Funds Flows data, investors added approximately $523 million to muni bond funds, marking the seventh straight week of muni bond funds inflows. This follows the prior week’s inflows of $426 million.

With a friendlier CPI coming in earlier in the week, showing us that the tariffs have not affected inflation as much a some have expected, we believe that these indications will pave the way for the Fed to cut rates twice later this year, as early as September. With Treasuries rallying on the CPI numbers and munis following suit, investor demand should continue as investors would look to lock in higher rates before any rate cuts.

Investors should continue to look further out in the curve as it is still the cheapest part of the curve when compared to Treasuries. Taking into account the 5-year average for ratios, the 2–5-year range of muni ratios are cheaper by about 3 percentage points, while the 10–30-year range is cheaper by an average of about 7 percentage points. This implies that long end continues to be the cheapest part of the curve in relative value and continues to imply that investors should take advantage of this as the front end is outperforming the long end in relative value and long end should start to catch up as demand returns.

Municipal Supply: The negotiated calendar will have an expected volume of just over $5.46 billion this week with the largest deal of the week being the Great Lakes Water Authority transaction which plans of selling $885 million, followed by the $835 million San Diego County Regional Airport issuance. The County of Riverside will issue a note deal totaling to $450 million. AmeriVet will be participating in one issue this week in the Selling-Group for the $248 million New York City Housing Development Corporation’s Housing Impact Bonds transaction which will consist of $163 million taxable bonds and $85 million tax-exempt bonds.

Have a great week!