Municipal New Issuance: Last week’s negotiated calendar totaled to $6.6 billion with the largest deals being the $1.2 billion Michigan State Trunk Line Revenue Bond issuance followed by the $1 billion New York City Transitional Finance Authority transaction which AmeriVet participated in the Selling-Group. In addition, AmeriVet participated as a Co-Manager on the $185 million Wisconsin Housing and Economic Development issuance and the $19.6 million New Hampshire Housing Finance Authority as a Selling-Group-Member. The New York City Transitional Finance Authority issue received large demand as their bonds repriced lowering the yields by 2 to 5 basis points.

Municipal Secondary Trading: Trading for the week totaled to $37.3 billion with 55% of trades being dealer sells. According to Bloomberg, clients put up roughly $6.41 billion last week compared to $6.15 billion from the prior week.

Municipal Spreads: Muni yields continued to rise this past week with 10-year notes rising by 7.8 basis points to 2.90%. With the rise in yields, munis underperformed compared to Treasuries as 10-year notes are now yielding 68.64% compared to when the ratios were at 66.42%. The muni curve did steepen by 2.7 basis points this past week to finish the week at 73 basis points.

With munis continuing to be weaker, investors pulled about $534 million from municipal bond funds last week according to Refinitiv Lipper US Fund Flows. This outflow follows the prior week’s outflow of $264 million. With volatility in Treasuries continuing to put pressure on munis, investors are being pushed to the sidelines until yields settle down.

With the underperformance in munis this past week, we did see the muni-Treasury ratio cheapen with the long end being impacted the most by 3 percentage points. The front end has improved slightly cheapening by 2 percentage points. Although we are seeing higher yields and cheaper bonds relative to Treasuries, investors are still not convinced that we have not seen the end of rising yields.

Municipal Supply: The final week of August will have an expected volume of just $2.4 billion with the largest deal being the $665 million Main Street Natural Gas followed by $290 million City of Jacksonville Florida issue. AmeriVet will be participating on two issues next week as a Selling-Group-Member which will be the $100 million South Carolina State Housing Finance and Development Authority transaction and the  $25 million Minnesota Housing Finance Agency issuance.