Municipals had been regular Friday forward of a smaller new-issue calendar. U.S. Treasury yields rose barely and equities ended blended.
The 2-year muni-UST ratio Friday was at 56%, the five-year at 60%, the 10-year at 71% and the 30-year at 90%, in line with Municipal Market Information’s 3 p.m. ET learn. ICE Information Providers had the two-year at 56%, the five-year at 59%, the 10-year at 71% and the 30-year at 92% at a 4 p.m. learn.
Munis and USTs have seen robust rallies this month. Tax-exempt munis, supported by USTs, are having an excellent month as MMD yields are down 30 to 35 foundation factors out lengthy, and each the investment-grade and high-yield indices are seeing features of greater than 2% month-to-date, Barclays strategists, led by Mikhail Foux, mentioned.
“In September, length appears to be the secret for our asset class: the lengthy finish is by far the perfect performing maturity bucket of the market, though for the yr, return of the 22-year plus bonds stay in destructive territory,” Barclays strategists mentioned.
BofA strategists’ predictions for “a late yr muni market rally” confirmed the primary indicators of coming to fruition, because the 10-year AAA MMD yield “greater than eliminated the April cheapening following President Trump’s Liberation Day tariff bulletins,” they mentioned.
“This got here barely sooner than we thought, although traders who’ve adopted our more and more open hypothesis and technique suggestions since late June are most likely not stunned by this nice final result,” they mentioned.
“Declining muni/Treasury ratios throughout this month of weaker principal redemptions and coupon funds,” is a constructive signal for the remainder of the yr, BofA strategists mentioned, including, this efficiency is a notable change from July’s and August’s “considerably disappointing” outcomes.
Strategists “remained reluctant to embrace the market’s blaming of huge provide” on how ratios carried out throughout these months, however now really feel the true perpetrator was “not massive provide, however fairly that muni traders wished some assurance that peak Treasury yields had been delivered,” they mentioned.
Now that BofA’s “3% goal for 10-year AAA bonds was attained,” strategists are setting their sights on the “2.50% to 2.60% space, adopted by the two.30% space,” for the bonds, BofA strategists mentioned.
“The two.50%-2.60% zone clearly has a excessive odds of being attained throughout the 2025 timeline; even the secondary goal zone of two.30% has an honest likelihood this yr,” they mentioned. “We consider by late October or early November, it ought to be clear whether or not the Fed has been proper on the curve or considerably behind.”
Modifications within the bigger macroeconomic panorama will invariably “change the Federal Reserve’s posture as nicely,” presumably leaving each “extra supportive of municipal bond market efficiency shifting ahead,” BofA Strategists mentioned.
New-issue calendar
Issuance for the week of Sept. 15 is at an estimated $4.738 billion, with $4.057 billion of negotiated offers and $681.5 million of aggressive offers on faucet, in line with LSEG.
The Metropolitan Transportation Authority leads the negotiated calendar with $1.014 billion of inexperienced local weather bond-certified transportation income refunding bonds.
The aggressive calendar is led by Greenville County Faculty District, Georgia, with $185.5 million of GOs.
AAA scales
MMD’s scale was unchanged: The one-year was at 2.12% and a pair of.00% in two years. The five-year was at 2.17%, the 10-year at 2.90% and the 30-year at 4.23% at 3 p.m.
The ICE AAA yield curve was unchanged: 2.06% in 2026 and a pair of.00% in 2027. The five-year was at 2.13%, the 10-year was at 2.87% and the 30-year was at 4.26% at 4 p.m.
The S&P International Market Intelligence municipal curve was little modified: The one-year was at 2.11% (+1) in 2025 and 1.99% (+1) in 2026. The five-year was at 2.16% (+1), the 10-year was at 2.90% (unch) and the 30-year yield was at 4.23% (unch) at 4 p.m.
Bloomberg BVAL was unchanged: 2.04% in 2025 and a pair of.00% in 2026. The five-year at 2.11%, the 10-year at 2.86% and the 30-year at 4.20% at 4 p.m.
Treasuries noticed small losses.
The 2-year UST was yielding 3.557% (+1), the three-year was at 3.526% (+2), the five-year at 3.626% (+3), the 10-year at 4.06% (+4), the 20-year at 4.642% (+3) and the 30-year at 4.677% (+2) close to the shut.
Major to return
The Metropolitan Transportation Authority (A2/A/AA/AA/) is about to cost Tuesday $1.014 billion of inexperienced local weather bond-certified transportation income refunding bonds, Sequence 2025B. Goldman Sachs.
Houston, Texas, (Aa3//AA/) is about to cost Tuesday $289.21 million of public enchancment refunding bonds. HilltopSecurities.
The Douglas County Faculty District (Aa1/AA+//) is about to cost Monday $274.64 million of Georgia State Support Intercept Program-insured GOs. Raymond James.
The Louisiana Public Amenities Authority (A1//A/) is about to cost Tuesday $211.24 million of Assured Warranty-insured lease income bonds (South Quad L3C — Louisiana State College South Quad (Part IV) Undertaking). RBC Capital Markets.
The New York Metropolis Housing Growth Corp. (Aa2///) is about to cost Tuesday $198.76 million of taxable sustainable improvement housing impression bonds, Sequence 2025D. Jefferies.
The Richmond County Board of Training, Georgia, (Aa1/AA+//) is about to cost Monday $198.205 million of Georgia State Support Intercept Program-insured GO gross sales tax bonds. Raymond James.
The Idaho Housing and Finance Affiliation (Aa1///) is about to cost Monday $175 million of taxable single-family mortgage bonds, 2025 Sequence E. BofA Securities.
The Philadelphia Authority for Industrial Growth (A1/A+/A+/) is about to cost Tuesday $170.27 million of metropolis service settlement income bonds, consisting of $128.79 million of Rebuild Undertaking bonds, Sequence 2025A, and $41.48 million of Cultural and Industrial Corridors Program refunding bonds, Sequence 2025B. Ramirez.
Sarasota County, Florida, (/AA+/AA+/) is about to cost Tuesday $146.71 million of utility system income bonds. BofA Securities.
Leander, Texas, (Aa1/AA//) is about to cost Thursday $132.105 million of mixture tax and income certificates of obligation. FHN Monetary Capital Markets.
Laredo, Texas, (Aa2/AA//) is about to cost Monday a $124.09 million deal, consisting of $31.7 million of mixture tax and income certificates of obligation, $32.57 million of tax notes, $22.965 million of property finance contractual obligations and $46.125 million of forward-delivery GO refunding bonds.
Aggressive
The Greenville County Faculty District, Georgia, (MIG1/A-1+//) is about to promote $185.5 million of GOs (South Carolina Faculty District Credit score Enhancement Program), Sequence 2025C, at 11:30 a.m. Japanese Thursday.
The Clover Faculty District No. 2, South Carolina, (MIG1///) is about to promote $156 million of GO bond anticipation notes at 11 a.m. Wednesday.
Tulsa, Oklahoma, is about to promote $107.705 million of GOs, Sequence 2025A, at midday Wednesday.
Jessica Lerner contributed to this story.
