Munis continued to see small losses on the entrance finish and small positive aspects out lengthy. U.S. Treasuries had been little modified, and equities ended down.
The 2-year muni-UST ratio Wednesday was at 70%, the five-year at 66%, the 10-year at 68% and the 30-year at 90%, in keeping with Municipal Market Information’s 3 p.m. EDT learn. ICE Information Companies had the two-year at 69%, the five-year at 66%, the 10-year at 69% and the 30-year at 90% at a 4 p.m. learn.
The Funding Firm Institute Wednesday reported inflows of $918 million for the week ending Oct. 15, following $369 million of inflows the earlier week.
Trade-traded funds noticed inflows of $1.174 billion after $2.253 billion of inflows the week prior, per ICI knowledge.
Munis entered the fourth quarter in “glorious form,” stated GW&Ok strategists.
“Nominal yields stay properly above their 10- and 20-year averages,” and the curve remains to be steep sufficient — regardless of current flattening — to supply “significant anticipated return from roll,” they stated.
Within the close to time period, technicals are combined, in keeping with GW&Ok strategists.
Whereas provide has moderated from its “torrid tempo” at the beginning of the yr, it’s nonetheless up 10% year-over-year, whereas reinvestment flows ought to stay “muted” till December, they stated.
“Ratios on the entrance finish are stretched, leaving much less cushion if broader yields again up, however worth persists in intermediate and longer maturities, the place roll and carry do extra of the work,” GW&Ok strategists stated.
In the meantime, the tax-exempt market is anticipated to be “biased greater” within the coming weeks and months because the anticipated heavy tempo of issuance this month won’t be as “oppressive” as feared, stated Pat Luby, head of municipal technique at CreditSights.
Demand has been constant, and lengthy bonds have been the perfect performer for the final two weeks and lead month-to-date, identical as in September, he stated.
“Assuming a continuation of the present regular degree of demand, we count on costs to be biased greater,” Luby stated.
Traditionally, September and October haven’t been the “kindest months” to muni traders, he stated.
From 2010 to 2024, “the typical complete returns for the ICE Muni Index in September and October had been the eleventh and twelfth ranked months of the yr, respectively,” with each months seeing common month-to-month losses of 0.24%, Luby stated, noting the muni index has seen positive aspects of 1.17% month-to-date.
If that holds, this might be the primary time in six years that October posted constructive complete returns and the perfect for the month since at the very least 2009, he stated. October 2013 noticed the present excessive return for the month of 0.94%.
“Up to now, as provide strain from the brand new subject market has tapered off within the final two months of the yr, common month-to-month efficiency has improved,” Luby stated.
From 2010 to 2024, the muni index has returned a mean of 0.88% in November, the perfect month of the yr, and 0.32% in December, the fifth-best month of the yr, he stated.
Within the major market Wednesday, J.P. Morgan priced for the New Jersey Transportation Belief Fund Authority (A1/A/A/A/) $1.5 billion of transportation program bonds, 2025 Sequence AA, with 5s of 6/2030 at 2.63%, 5s of 2035 at 3.04%, 5s of 2040 at 3.64%, 5s of 2045 at 4.22%, 5s of 2050 at 4.52%, 5.25s of 2050 at 4.43% and 5s of 2055 at 4.61%, callable 12/15/2035.
BofA Securities priced for the Kentucky State Property and Buildings Fee (Aa3//AA-/) $940.4 million of Undertaking No. 133 income bonds. The primary tranche, $775 million of Sequence A bonds, noticed 5s of 9/2026 at 2.69%, 5s of 2030 at 2.67%, 5s of 2035 at 3.04%, 5s of 2040 at 3.61% and 5s of 2045 at 4.13%, callable 9/1/2035.
The second tranche, $165.4 million of Sequence B refunding bonds, noticed 5s of 9/2026 at 2.69%, 5s of 2030 at 2.67% and 5s of 2035 at 3.04%, noncall.
Morgan Stanley priced for the California Group Alternative Financing Authority (Aa2///) $850 million of inexperienced clear vitality undertaking income bonds, Sequence 2025F, with 5s of 11/2033 at 3.55%, callable 8/1/2033.
CUSIP requests fall
In September, the combination complete of identifier requests for brand new municipal securities — together with municipal bonds, long-term and short-term notes, and business paper — fell 20.6% versus August totals.
On a year-over-year foundation, total municipal volumes had been up 17.3% by way of the tip of September.
Texas led state-level municipal request quantity with a complete of 165 new CUSIP requests in September, adopted by New York (114) and California (68).
For the particular class of municipal bonds, there was a drop of 18.2% month-over-month, however these requests are nonetheless up 17.6% year-over-year.
AAA scales
MMD’s scale was bumped eight years and out: 2.51% (+2) in 2026 and a couple of.41% (+2) in 2027. The five-year was 2.34% (unch), the 10-year was 2.70% (-2) and the 30-year was 4.10% (-1) at 3 p.m.
The ICE AAA yield curve was combined: 2.46% (+1) in 2026 and a couple of.38% (+1) in 2027. The five-year was at 2.37% (+1), the 10-year was at 2.73% (-1) and the 30-year was at 4.08% (unch) at 3 p.m.
The S&P World Market Intelligence municipal curve was little modified: The one-year was at 2.48% (+2) in 2025 and a couple of.40% (+2) in 2026. The five-year was at 2.34% (unch), the 10-year was at 2.71% (-1) and the 30-year yield was at 4.08% (-1) at 3 p.m.
Bloomberg BVAL was bumped eight years and out: 2.46% (+2) in 2025 and a couple of.40% (+2) in 2026. The five-year at 2.32% (+2), the 10-year at 2.69% (-3) and the 30-year at 4.04% (-2) at 4 p.m.
Treasuries had been little modified.
The 2-year UST was yielding 3.443% (-1), the three-year was at 3.446% (-1), the five-year at 3.552% (-1), the 10-year at 3.954% (-1), the 20-year at 4.512% (-1) and the 30-year at 4.54% (flat) close to the shut.
Main to return
The Sacramento Metropolis Unified Faculty District, California, (/AA//) is about to cost Thursday $451.88 million of GO bonds, consisting of $262.5 million of GO 2020 Election (Measure H) bonds, Sequence C; $143 million of GO 2024 Election (Measure D) bonds, Sequence A; $9.855 million of 2025 GO refunding bonds, Sequence A; and $36.525 million of 2025 GO refunding bonds, Sequence B. Loop Capital Markets.
The Oklahoma Metropolis Water Utilities Belief (Aaa/AAA//) is about to cost Thursday $185.91 million of utility system income refunding and enchancment bonds. Morgan Stanley.
The Glendale Industrial Growth Authority, Arizona, (/AA-/AA/) is about to cost Thursday $150 million of Midwestern College income. Raymond James.
The Village Group Growth District No. 16, Florida, is about to cost Thursday $127 million of nonrated particular evaluation income bonds. Jefferies.
The Colorado Well being Services Authority (/A-//) is about to cost Thursday $125 million of Craig Hospital Undertaking hospital income bonds, consisting of $105 million of Sequence A and $20 million of Sequence B. RBC Capital Markets.
The South Carolina Scholar Mortgage Corp. (/AA//) is about to cost Thursday $112.1 million of taxable senior pupil mortgage income bonds, Sequence 2025A. RBC Capital Markets.
Oregon (Aa1/AA+/AA+/) is about to cost Thursday $109.44 million of GOs, Sequence 2025K. Morgan Stanley.
Aggressive
Suffolk County, New York, (/AA-/AA-/) is about to promote $188.735 million of public enchancment serial bonds, Sequence 2025A, at 11 a.m. Thursday.
Henrico County, Virginia, (///AAA/) is about to promote $125 million of water and sewer system income bonds, Sequence 2025D, at 10:30 a.m. Thursday.
