Municipal New Issuance: Last week’s negotiated calendar totaled to just over $8 billion as many issuers decided to issue prior to this weeks Fed rate decision. The most notable deals of the week were the $877 million New York Transportation Development Corporation issue for the LaGuardia Delta Airport Terminal project, followed by the $840 million Los Angeles Unified School District issuance. The City of San Francisco issued $794 million for their International Airport (SFO) and the New York State Power Authority issued $734 million.

Municipal Secondary Trading: Secondary trading for the week totaled to just over $54.66 billion with 51% of all secondary trades being dealer sells. With yields continuing to rise this past week, we did see a record number of bids-wanted. According to Bloomberg, clients put up just over $10.63 billion up for the bid compared to the prior week’s total of $8.92 billion.

Municipal Spreads: Muni yields remained relatively unchanged for the week as 10-year notes rose by just by .8 basis points to close the week at 3.64%. With yields being unchanged for the week, we did see muni ratios rise as 10-year notes are now yielding 75.34% of US Treasuries compared to 73.98% a week ago. Just one month ago, those ratios were 73.20%. With the slight rise in yields, the muni curve did steepen slightly by 2.6 basis points to end the week at 89 basis points.

According to LSEG Lipper Global investors, investors pulled approximately $935 million from municipal bonds funds this past week which follows the prior weeks outflow of $297 million and marks the eighth consecutive week of outflows. With yields continuing their upward trend, we will continue to see investors pull their investments from bond funds.

With October coming to a close, we are currently down .91% for the month and 2.28% for the year, keeping us on track for the second straight year of declines due to the Fed’s interest-rate hikes and their intentions to keep rates higher in the longer term to tame inflation. Although we are poised for another down-year, yields have surged to their highest points in over a decade, reaching levels that we should expect to see investors re-enter into the muni market bringing demand back into the municipal markets.

Municipal Supply: With the Fed rate decision this week, the negotiated calendar will have an expected volume of just over $1.9 billion. The largest deals this week are the $189 million Connecticut Housing Finance Authority issue followed by the $171 million City of Dallas Texas issue, and the $162 million Southern California Public Power Authority.