Municipal New Issuance: This past week, the negotiated calendar had a total issuance of just over $11.19 billion, with the largest deals of the week being the New York Transportation Development Corporation which issued $1.36 billion for JFK Airport. The next largest deal of last week was the $1 billion California Community Choice Finance Authority. The New York Energy Finance Development Corporation issued $944 million.

Municipal Secondary Trading: Secondary trading volume totaled just over $42.28 billion with 56% of secondary trading being dealer sells. According to Bloomberg, clients put roughly $6.09 billion up for the bid, up from the prior week’s number of $5.46 billion.

Municipal Spreads: Munis continued their sell off this past week with the long end seeing the largest cuts. Over the past week, muni yields rose by an average of 15 basis points. Yields on the 10-year notes rose by 16.1 basis points over the past week to end the week at 3.34%. We did see munis cheapen this past week when compared to Treasuries, as the 10-year muni-to-Treasury ratio is now yielding 75.06% compared to 73.11% a week ago. With the sell off, the muni curve did steepen by 21.8 basis points to end the week at 231 basis points.

For the first time in 11 weeks, muni bond funds saw outflows of about $225 million, with the long-term funds seeing $625 million in outflows according to LSEG Lipper Global US Fund flows data. This outflow follows the prior week’s inflow of $432 million.

Munis extended their sell off this past week with returns for the month now being down by 1.05%, bringing our year-to-date losses to 1.39%. With rates rising overall this month due to dwindling expectations that a rate cut could happen in September due to CPI coming in higher than expected, heavy supply this week (~$16 billion – Negotiated & Competitive), and low seasonal reinvestment, investors are being more cautious by staying on the sidelines or focusing on the front end. With yields rising the most in the long end, we continue to see the muni curve steepen. Since the start of the year the 2–10-year curve has steepened by 55 basis points, the 10-30-year curve steepened by 70 basis points, and the 2-30-year curve steepened by 126 basis points.

Municipal Supply: The negotiated calendar for the week will have an expected volume of just over $10 billion with the largest deals of the week being the $1.5 billion Future Tax Secured New York City Transitional Finance Authority issuance, of which AmeriVet will be participating in the Selling-Group. The City of Houston will be issuing $719 million in Airport System Subordinate Lien Revenue Bonds. The third largest deal of the week will be the $703 million Tarrant County Cultural Education Facilities Finance Corporation which will be issuing Texas Health Resources System Revenue Bonds.

Have a great week!