Municipal New Issuance: The final week of June saw the negotiated calendar for the week totaled roughly $4.7 billion of new issue supply. The largest deal of the week was the $450 million New York City Water Finance Authority, which saw strong investor demand. AmeriVet was a syndicate member for that issue and was also part of one other deal, the $ 262 million State of New York Mortgage Agency Revenue bonds. Another issue of note was the City of Philadelphia Airports Revenue bonds which issued $302 million of debt which are subject to the Alternative Minimum Tax (AMT).

Municipal Secondary Trading: With the holiday shortened week given the early close of the market on Friday for the July 4th holiday weekend secondary trading was very light with total volume of approximately $20 billion.  Most of the trading was done during the first half of the week as many market professionals took off Thursday as well as Friday.  We do expect trading volume to continue to be light this week as investor focus turns to the new issue calendar.  According to Bloomberg clients placed roughly $1.8 billion up for the bid, which is down from the prior week of $2.88 billion.

Municipal Spread: After a couple weeks of yields increasing municipal bond yields fell for the week as continued demand helped overall market performance. Yields on the Bloomberg 10-year benchmark fell by 3.9 basis points to 0.981 for the week. Even with drop in yields municipal bonds slightly underperformed Treasuries for week as the 10-yearbenchmark is now yielding 68.79% of Treasuries compared to 66.88% a week ago. The municipal bond curve flattening as well with the gap between yields on short-term and long-term bonds flatten by 4.8 basis points to 138 basis points.

For the 17^th straight week municipal bond funds saw a weekly inflow of$832 million according to Refinitiv Lipper US Fund Flows. Year to date new money inflows have totaled over $46 billion which is an all-time record for the first 6 months of the year.

With half of 2021 completed, municipal bonds have been one of bright the spots for fixed income investors who along with other investors suffered as the global economy tries to recover from the Corona Virus pandemic. In the first half of 2021 municipal bonds have earned around 1.1% which has outperformed U.S Treasuries as well as corporate bonds with U.S Treasuries losing around 2.58% and corporate bonds losing about 1.27%. High Yield municipals have shown the best returns with 6.12% while high yield corporates returned 3.62% so far. With rebounding revenues, federal aid, improving state and local economies and huge demand for tax-exempt bonds it comes as no surprise municipal bonds are near historically low levels. The Fed has been supporting the fixed income and equity markets by providing liquidity through their purchases of both treasury and mortgage-backed debt. One important consideration that could drive investor appetite for more municipal bonds will be the prospect of higher federal3 taxes, but if that does not come to fruition those gains could fade.

Municipal Supply: Supply for the July 4th holiday shortened week is expected to be light with a total expected volume of around $ 3.4 billion with one deal taking over half of the volume. AmeriVet will be a Co-manager in the largest deal of the week which will is the $1.8 billion California State University Systemwide Revenue Bonds which will include taxable bonds as well as tax-exempt bonds. The next largest deal will the $343 million City of Tempe Arizona taxable bonds.