Municipals have been little modified Friday, not more than a foundation level or two, forward of $14.8 billion new-issue calendar that boasts a number of billion-plus greenback offers. U.S. Treasury yields have been little modified and equities ended up.
The 2-year muni-UST ratio Friday was at 56%, the five-year at 58%, the 10-year at 70% and the 30-year at 89%, in response to Municipal Market Information’s 3 p.m. ET learn. ICE Information Providers had the two-year at 57%, the five-year at 58%, the 10-year at 69% and the 30-year at 90% at a 4 p.m. learn.
Munis have outperformed USTs and corporates by greater than 1.0% month-to-date on the heels of this rally thus far, BofA strategists stated.
Lengthy-end muni yields even fell on Wednesday regardless of a UST selloff following the Federal Reserve’s resolution to chop charges 25 foundation factors, because the market anticipated.
Muni yields have been little modified, although barely weaker, on Thursday and Friday.
Muni efficiency year-to-date has lagged far behind USTs and corporates, however BofA strategists consider the muni outperformance towards USTs and corporates for September month-to-date will proceed to yearend, and the “bulk” of the outperformance has not occurred but.
Issuance for the week of Sept. 22 is an estimated $14.78 billion, with $11.789 billion of negotiated offers and $2.991 billion of aggressive offers on faucet, in response to LSEG.
California leads the negotiated calendar with $2.3 billion of assorted objective common obligation bonds, adopted by the Texas Water Improvement Board of $1.871 billion of state water income bonds and Connecticut (Aa2/AA-/AA/AA+) with $1.815 billion of GOs.
The aggressive calendar is led by Minnesota with $1.266 billion of GOs in six sequence.
Whereas quantity is elevated subsequent week, provide has slowed throughout the second half of the yr, as substantial quantity of issuance had been pulled ahead, Barclays strategists led by Mikhail Foux stated.
The 30-day seen provide is barely under common at a “manageable” $14 billion, they stated.
“This yr’s provide dynamics have performed a considerable function in cheapening sure components of the muni market which have been extra energetic issuers of bonds,” Barclays strategists stated.
For instance, California’s internet issuance was heavy to start out 2025 however slowed over the previous few months, they stated.
Attributable to this, the market section grew to become low cost early on however has been outperforming the investment-grade index because the finish of July, and California paper has turn out to be fairly wealthy, Barclays strategists stated.
Nonetheless, New York and Texas paper remained heavy over the summer time, and the states’ paper efficiency have lagged California consequently, they stated.
Over the following 30 days, internet issuance of Massachusetts and Florida paper is predicted to be detrimental, which ought to help them, Barclays strategists stated.
“California and Texas will turn out to be heavy issuers once more; whereas Texas bonds look comparatively low cost, California paper is wealthy and would possibly begin cheapening to a level as a consequence of deteriorating market technicals,” they stated.
AAA scales
MMD’s scale was little modified: The one-year was at 2.12% (unch) and a pair of.02% (unch) in two years. The five-year was at 2.15% (unch), the 10-year at 2.88% (unch) and the 30-year at 4.22% (+1) at 3 p.m.
The ICE AAA yield curve was reduce one to 2 foundation factors: 2.12% (+2) in 2026 and a pair of.05% (+1) in 2027. The five-year was at 2.14% (+1), the 10-year was at 2.85% (+1) and the 30-year was at 4.23% (+2) at 4 p.m.
The S&P World Market Intelligence municipal curve was little modified: The one-year was at 2.11% (unch) in 2025 and a pair of.01% (unch) in 2026. The five-year was at 2.16% (unch), the 10-year was at 2.88% (unch) and the 30-year yield was at 4.22% (+1) at 3 p.m.
Bloomberg BVAL was reduce as much as two foundation factors out lengthy: 2.04% (unch) in 2025 and a pair of.00% (unch) in 2026. The five-year at 2.10% (unch), the 10-year at 2.83% (unch) and the 30-year at 4.19% (+2) at 4 p.m.
Treasuries have been little modified.
The 2-year UST was yielding 3.575% (+1), the three-year was at 3.56% (+1), the five-year at 3.681% (+2), the 10-year at 4.128% (+2), the 20-year at 4.711% (+2) and the 30-year at 4.745% (+2) on the shut.
Main to come back
California (Aa2/AA-/AA//) is about to cost Thursday $2.3 billion of GOs, consisting of $700 million of assorted objective GOs and $1.6 billion of assorted objective refunding GOs. Wells Fargo.
The Texas Water Improvement Board (/AAA/AAA/) is about to cost Wednesday $1.871 billion of state water implementation income fund for Texas income bonds (Grasp Belief). BofA Securities.
Connecticut (Aa2/AA-/AA/AA+) is about to cost Wednesday $1.815 billion of GOs, consisting of $300 million of taxable Sequence B bonds, $800 million of Sequence C bonds and $715 million of Sequence 2025 refunding bonds. Morgan Stanley.
Texas (/AAA/AAA/) is about to cost Thursday $761.98 million of GO water monetary help bonds (State Water Plan), with $444.725 million of Sequence 2025E bonds and $317.245 million of taxable Sequence 2025F bonds. BofA Securities.
The San Diego Public Services Financing Authority (/AA-/AA/) is about to cost Tuesday $625.87 million of lease income and lease income refunding bonds (capital enchancment and refunding tasks), Sequence 2025A. Jefferies.
The Michigan State Housing Improvement Authority (Aa2/AA+//) is about to cost Thursday $547.5 million of single-family mortgage income bonds, consisting of $412.105 million of non-AMT bonds, Sequence 2025C, and $135.395 million of taxables, Sequence 2025D. RBC Capital Markets.
The Washington Well being Care Services Authority (/A/A/) is about to cost Tuesday $400 million of income bonds (Windfall St. Joseph Well being), consisting of $200 million of fixed-rate Sequence 202B-1 bonds and $200 million of term-rate Sequence 202B-2 bonds. J.P. Morgan.
San Antonio, Texas, (Aa1/AA+/AA/) is about to cost Tuesday $297.87 million of water system junior lien income refunding bonds, Sequence 2025C. BofA Securities.
The Missouri Well being and Instructional Services Authority (A2//A/) is about to cost Tuesday $253.545 million of well being services income refunding bonds (CoxHealth), consisting of $135.88 million of Sequence 2025A and $117.665 million of Sequence 2025B. RBC Capital Markets.
The Public Hospital District No. 4, Washington, is about to cost Wednesday $174.13 million of nonrated hospital income refunding bonds (Snoqualmie Valley Well being), Sequence 2025A. Piper Sandler.
Quincy, Massachusetts, is about to cost Tuesday $170.222 million of GO bond anticipation notes. Ramirez.
The State Middle Group School District, California, (Aa1/AA+//) is about to cost Tuesday $137.28 million of GOs, consisting of $105 million of Election of 2016 GOs, Sequence 2025D, and $32.28 million 2025 GO refunding bonds. RBC Capital Markets.
The Ohio State Treasurer (Aa1/AA+/AA+/) is about to cost Monday $125.52 million of capital services lease-appropriation variable fee bonds (Grownup Correctional Constructing Fund Initiatives), Sequence 2025B. Piper Sandler.
The New York Metropolis Housing Improvement Corp. (Aa2/AA+//) is about to cost Thursday $121.46 million of non-AMT sustainable growth multi-family housing income bonds, Sequence 2025F. J.P. Morgan.
The Northshore Faculty District No. 417, Washington, (Aaa///) is about to cost Tuesday $117.56 million of limitless tax refunding GOs. Piper Sandler.
The Virginia Housing Improvement Authority (Aa1/AA+//) is about to cost Monday $111.795 million of rental housing bonds, Sequence 2025E. BofA Securities.
The Valparaiso twenty first Century Faculty Constructing Corp. (/AA+//) is about to cost Tuesday $105.415 million of Indiana State Support Intercept Program-insured limitless advert valorem property tax first mortgage refunding bonds. Stifel.
Aggressive:
Minnesota (Aaa/AAA/AAA/) is about to promote $294.915 million of state trunk freeway GOs, Sequence 2025B, at 10:15 a.m. Jap Tuesday; $275.215 million of state varied objective GOs, Sequence 2025A, Bidding Group 1, at 10:45 a.m. Tuesday; $275.2 million of state varied objective GOs, Sequence 2025A, Bidding Group 2, at 11:15 a.m. Tuesday; $236.195 million of state varied objective refunding GOs, Sequence 2025D, at 11:45 a.m. Tuesday; $158.69 million of state trunk freeway refunding GOs, Sequence 2025E, at 12:15 p.m. Tuesday; and $25.6 million of taxable varied objective bond GOs, Sequence 2025C, at 12:45 p.m. Tuesday.
The North Texas Municipal Water District (Aa2/AAA//) is about to promote $286.84 million of regional wastewater system income refunding and enchancment bonds at 11:30 a.m. Thursday.
The North Texas Municipal Water District (Aa1/AAA//) is about to promote $152.18 million of Higher East Fork wastewater interceptor system contract income refunding and enchancment bonds at midday on Thursday.
The Pinellas County Faculty District is about to promote $150 million of tax anticipation notes at 11 a.m. Thursday.
The Park Hill Faculty District, Missouri, /AA-//) is about to promote $128 million of GOs (Missouri Direct Deposit Program) at 11 on Tuesday.
The Oldham County Faculty District, Kentucky, (Aa3///) is about to promote $106.415 million of GOs (Kentucky Faculty District Enhancement Program), Sequence 2025B, at 10:30 a.m. on Tuesday.
Frank Gargano contributed to this story.
