Municipal New Issuance: This past week, the negotiated calendar had a total issuance of just over $10.3 billion, with the largest deal of the week being the $1.5 billion New York City Transitional Finance Authority Future Tax Secured Subordinate Bonds transaction which AmeriVet participated in the Selling-Group. The next largest deal of the week was Tarrant County which issued $911 million followed by the Houston Airport System Revenue, which issued $677 million.

Municipal Secondary Trading: Secondary trading volume totaled just over $47.47 billion with 52% of secondary trading being dealer sells. According to Bloomberg, clients put approximately $7.97 billion up for the bid, a notable increase from the prior week’s number of $6.09 billion.

Municipal Spreads: After a couple of weeks of rising yields, munis rallied over the past week with yields falling by an average of about 3.9 basis points across the curve with yields on 10-year notes bumping by 2.9 basis points to end the week at 3.33%. Despite yields falling this past week, munis did underperform Treasuries with the 10-year muni-to-Treasury ratio now yielding 76.02% compared to 76.07% from the prior week. We continue to see the muni curve steepen with the curve this week steepening by 2 basis points to 231 basis points.

After a week of outflows, muni bond fund flows saw a return of inflows to the sum of $572 million. This follows the prior week’s outflow of $225 million. With just one week left in the month, munis continue to struggle with month-to-date returns totaling to -.65% leaving our year-to-date returns still in the red at just under 1%. With just one week left in the month, this could be our first down July since 2013 in which we saw losses of .90%. Munis are about 41 basis points higher from the start of the year and with Treasuries up for the year, munis are on pace to have their worst performance since 2020.

Since the start of the year, the 10-year ratio was at 68.09% and we are currently at 76.02%, but are down from our highs of 88.14% back in April, the month in which the President announced reciprocal tariffs. Although munis are at a loss for the year and still underperforming Treasuries, investors should still consider going out in the curve as it is still the cheapest part of the curve with ratios at 96.83% as we are starting to see munis at a discount on the long end, making it attractive among retail investors. The underperformance of munis can also be attributed to over-supply as many issuers entered the markets early as there were talks of the removal of tax-exemption on certain tax brackets but was left out of the “One Big Beautiful Bill”.

Municipal Supply: The negotiated calendar for the last week of July will have an expected volume of just over $9.38 billion, with the largest deal of the week being the $3.5 billion Public Finance Authority Georgia SR 400 Express Lanes Project, followed by the $420 million City of Orlando Contract Tourist Development Tax Revenue Bonds issuance. Notably the City of Orlando transaction is not rated but is insured by Assured Guaranty Inc. AmeriVet will be serving as a Co-Manager for the $58 million New York State Housing Finance Agency Affordable Housing Revenue Bonds transaction which are featuring a Sustainability Bonds designation.

Have a great week!