Municipal New Issuance: This past week, the negotiated calendar issued just over $6.3 billion, with the largest deals of the week being the $2 billion Dormitory Authority of New York, followed by $1.9 billion issued by the Massachusetts School Building Authority. The next largest deal of the week was the $360 million Michigan State Housing Development Authority.

Municipal Secondary Trading: Secondary trading volume totaled just over $41.02 billion, with 55% of secondary trading being dealer sells. According to Bloomberg, clients put roughly $3.46 billion up for the bid, down from the prior week’s number of $4.50 billion.

Municipal Spreads: For the first week of September, muni yields fell by an average of 12.8 basis points, with yields on 10-year notes falling by 13.2 basis points, ending the week at 3.05%. With yields falling, munis were able to outperform Treasuries over the past week with the 10-year muni-to-Treasury now yielding 75.03%. For comparison, this ratio during the prior week was at 75.69%. We did see the muni curve flatten this past week by 9.2 basis points to 234 basis points.

According to LSEG Lipper Global U.S. Fund Flows Data, investors added roughly $672 million to muni bond mutual funds this past week. This follows the prior week’s inflow of $591 million.

September is off to a strong start with muni yields seeing bumps of 4-15 basis points across the curve this past week, which brings our year-to-date returns to 1.21%. With a disappointing jobs report in Friday, investors have fully priced in a 25 basis point cut later this month with the possibility of two additional rate cuts this year. Friday’s jobs data fueled a rally in Treasuries and munis, with munis seeing a bump of 7 basis points in the 2027-2035 range, and a 9 bps bump in the 2036-2038 range. In the 2039-2055 range, we saw a 10-12 basis points bump in MMD. Both inflation data and retail sales later this week could give us an indication as to how much the Fed will be willing to cut later this month, along with any other cuts for the rest of the year.

Municipal Supply: Supply for the week will have an expected volume of just over $8.28 billion with the largest deal of the week being the $1.7 billion City of Dallas and Forth Worth, Texas, for the Dallas Forth Worth International Airport. The next largest deal of the week will be the City of Atlanta for the Hartsfield-Jackson Atlanta International Airport, and they plan on issuing $1.02 billion. The Black Belt Energy Gas District plans on issuing $925 million, and the City of Austin expects to issue $774 million. AmeriVet will be participating as a Selling Group Member in one issue this week, which will be the $150 million Florida Housing Finance Corporation’s Homeowner Mortgage Revenue Bonds, 2025 Series 5 (Non-AMT).

Have a great week!