Municipal New Issuance: Last week’s negotiated calendar totaled to just under $2 billion as many issuers decided to hold off on issuing during the final week of August. The largest deal of the week was the $200 million Pasco County Florida Hospital issue. AmeriVet participated in two deals this past week as a Selling-Group-Member which were the $100 million South Carolina State Housing Finance and Development Authority and the $26 million Minnesota Housing Finance Agency issuances respectively.

Municipal Secondary Trading: Trading for the week totaled to $36.23 billion with 56% of trades being dealer sells and with the majority of the trading being on Tuesday and Wednesday. According to Bloomberg, clients put up roughly $5.56 billion last week compared to $6.41 billion from the prior week.

Municipal Spreads: After two straight weeks of rising yields, muni yields fell this past week with 10-year notes falling by 3.3 basis points to 2.87%. Although yields did fall, munis did underperform Treasuries as the 10-year muni-to-Treasuries ratio rose to 70% compared to 68.45% a week ago. The muni curve did steepen this past week by 1.7 basis points to end the week at 74 basis points.

With munis slightly firmer this past week, we did see investors add to municipal bond funds as Refinitiv Lipper US Fund Flows reports that investors added about $408 million to the funds. This inflow of $408 million follows last week’s outflow of $534 million.

August had the worst performing month since February as munis declined by 1.44% for the month as yields hit their highest this year. August is typically a weak month and the last four months have been in the red. Fixed income securities declined this month as the Fed has signaled that they may continue to hike interest rates as the economy is still robust. Investors are still cautious about jumping back into munis even as rates are nearing multi-year highs as tax-exempts are still not cheap enough with the front-end ratios still yielding under 70% while the historical averages are around 90%.

Municipal Supply: The Negotiated supply for the first week of September will have an expected volume of $6.28 billion with two deals covering over half of the issuance. The largest deal of the week, which AmeriVet will be participating in the Selling-Group, is the $2.6 billion State of California issue which will include a refunding portion. The Port Authority of New York and New Jersey will be issuing $1 billion. Demand should be high as $21 billion of principal and interest will be paid out to bond holders on September 1^st.