Municipal New Issuance: With the holiday shortened week, the negotiated calendar had a total volume of $6.1 billion with the largest deals of the week being the $937 million San Diego County Regional Airport, followed by the $830 million Southeast Energy Authority. AmeriVet participated in one deal this past week as a Selling Group Member for the New York City Housing Development Corporation which issued $163 million in taxable bonds and $85 million in tax-exempt bonds.

Municipal Secondary Trading: Secondary trading volume totaled to just over $33.49 billion last week with 55% of secondary trading being dealer sells. According to Bloomberg, clients put roughly $4.71 billion up for the bid, a decrease from the prior week’s total of $6.86 billion, largely due in part to the Juneteenth Holiday last Thursday.

Municipal Spreads: This past week, muni yields fell by an average of 1.85 basis points with 10-year notes seeing a 2.4 basis points bump to end the week at 3.26%. With yields falling this past week, munis were able to outperform Treasuries as the 10-year muni-to-Treasury ratio is now yielding 74.62% compared to 74.77% from the prior week. We did see the muni curve steepen over the past week by 2.7 basis points to finish the week at 188 basis points.

With the Fed holding rates steady last week munis were relatively unchanged with yields on the front end seeing the most bumps last week with bumps of about 3.4 basis points and pushing month-to-date returns of .47%, the belly of the curve saw a modest bump with an average bump of 3 basis points across that range bringing month-to-date return of .52%, while the long end saw just only a 1 basis point bump, and the month-to-date return of just .06%. With the gains in munis last week our month-to-date returns are now at .32% with our year-to-date returns at a -.64%, our year-to-date returns last month was at -.96%.

With all signs pointing to two rate cuts this year, and most expecting a rate cut in September, investors should focus on 10–30-year range as that part of the curve continues to be the cheapest part of the curve when compared to Treasuries. The front part of the curve continues to be the richest part of the curve, and has richened the most in a 2 month span with the 2–7-year range richening by an average of 17 percentage points, while the 10–30-year range richened by 11 percentage points.

Municipal Supply: The negotiated calendar will have an expected volume of approximately $8.78 billion this week, with the largest deal of the week being the $1.5 billion City of Los Angeles Notes deal. The North Texas Municipal Water District plans on selling $884 million and the Northwest Independent School District plans of selling $798 million. Additionally, the State Building Authority of Michigan will issue $752 million. AmeriVet will be participating in one issue this week in the Selling Group for the $51 million Maryland Community Development Administration Housing Revenue Bonds (Sustainability) issuance.

Have a great week!