Municipal New Issuance: This past week, the negotiated calendar totaled to just over $14.96 billion, with the largest deal of the week being the $2.1 billion State of California Various Purpose General Obligation Bonds issuance which AmeriVet participated in as a Selling Group Member. The next largest deal of the week was the $1.83 billion Texas Water Development Board State Water Implementation Revenue Fund issuance. The Kentucky Public Energy Authority issued $834 million. Notably, AmeriVet served the State of Connecticut as a Co-Manager for their $1.8 billion General Obligation Bonds transaction consisting of $1.5 billion in tax-exempt bonds and $300 million in taxable bonds.

Municipal Secondary Trading: Secondary trading volume totaled to approximately $40.50 billion, with 52% of secondary trading being dealer sells. According to Bloomberg, clients put roughly $5.83 billion up for the bid, an increase from the prior week’s total of $5.53 billion.

Municipal Spreads: This past week, munis yields rose to an average of 9.4 basis points, with the front end seeing the largest cuts. Yields on 10-year notes rose by 7.4 basis points to end the week at 2.90%. With muni yields rising this past week, munis did under-perform Treasuries over the past week with the 10-year muni-to-Treasury ratio is now yielding 70.23%, compared to the prior week when the ratio was at 69.09%. We did see the muni curve flatten this past week by 12.2 basis points to end the week at 210 basis points.

According to LSEG Lipper Global U.S. Fund Flows data, investors pulled approximately $17.9 million from muni bond funds last week. This follows the prior weeks inflow of $1.05 billion. This outflow follows five straight weeks of inflows and marks the second week of outflows in the course of 10 weeks.

Munis sold off this past week with the front seeing the largest cuts since hiring has slowed on the jobs front and GDP growing to 3.8% during Q2, pushing Treasuries higher. Munis followed suit and we are now expecting only one rate cut for the remainder of the year instead of the two additional cuts forecasted a few weeks ago. As previously mentioned, we saw the largest cuts in the front end with cuts of 23 basis points on 2026-2029 maturities, 11-17 basis points on the 2030-2032 maturities, and 5-7 basis point cuts on the 2033-2055 maturities. Despite the cuts this past week, muni returns for the month continue to remain in the green as returns for the month are at 2.20%, with year-to-date returns at 2.52%.

Municipal Supply: Supply for the week will have an expected volume of just over $5.76 billion, with largest deal of the week being the $812 million Department of Water and Power of the City of Los Angeles Power System Revenue Bonds issuance. This is followed by Allegheny County Sanitary Authority, which plans on issuing $421 million. AmeriVet will be serving the Wisconsin Housing and Economic Development Authority as a Co-Managing Underwriter for their Housing Revenue Bonds, 2025 Series A and B (Non-AMT) issuance.

Have a great week!