Municipal New Issuance: With a shortened trading week due to the Presidents’ Day Holiday, the negotiated calendar had a total volume of $4.7 billion with the largest deal being the $658 million New Jersey Educational Facilities Authority for the Princeton University. The second largest deal last week was the $622 million Maryland Transportation Authority issuance.

Municipal Secondary Trading: Secondary trading for the week totaled to about $29.98 billion, with 53% of all secondary trades being dealer sells. With a large calendar this week, we should expect that the main focus will be on the new issue calendar. According the Bloomberg, client’s bids-wanted totaled to just over $4.6 billion with the largest volume of bids-wanted being last Thursday with $1.4 billion.

Municipal Spreads: Muni yields remained relatively unchanged, with 10-year notes rising by .4 basis points to 2.54%. With yields remaining unchanged for the week, we did see munis underperform Treasuries with 10-year notes yielding 59.93% of Treasuries compared to the prior week when the ratio was at 59.61%. We did see a slight steepening of the muni curve with the curve steepening by .4 basis points to end the week at 89 basis points.

According the LSEG Lipper Global Fund Flows data, for the third week in a row muni bond funds saw outflows with investors pulling roughly $11.4 million. Just prior to last week, there was an outflow of $140.9 million.

With munis yields continuing to trend higher this month, they are still faring better than Treasuries as we can see munis outperform Treasuries with the 5-year maturities showing the most sizeable out-performance since the start of the month. Since the start of the month, 5-year maturities have dropped by 5 percentage points, 2-year notes have fallen 4.88 percentage points, and 10-year notes have dropped by just 3.9 basis points. This is significant as this shows that yields continue to be attractive even as yields trend higher.

Municipal Supply: The negotiated calendar will have an expected volume of just over $5.3 billion with the largest deal being the $1.5 billion City of New York General Obligation Bonds issuance which AmeriVet will be participating in the Selling-Group. The next largest deal of the week will be the Hurst-Euless-Bedford Independent School District issue which will offer $600 million, followed by the $351 Texas Transportation Commission State Highway Fund. Although visible supply continues to be low, currently standing at $9.62 billion, it is still above the 2023 average of $8.9 billion.