Municipals were further weaker on Monday as losses on U.S. Treasuries widened, as investors digested rising oil prices on the back of geopolitical tensions and uncertain macroeconomic data ahead. Stock prices ended lower.
MUNI yields were lowered by 2-5 basis points depending on the curve, while UST yields rose 5-7 basis points, with the UST 10-year yield above 4% for the first time since August.
Jason Wong, vice president for local government, said Friday’s better-than-expected jobs report led market participants to expect a 25-basis point (bp) rate cut at the next Fed meeting instead of 50. That’s why yields rose this week, he said. At Ameribet Securities.
Munis is outweighing the large losses in UST, resulting in a richer Muni-UST ratio environment.
The Treasury-to-Treasury ratio on Monday for two-years was 59%, three-years 60%, five-years 61%, 10-years 65% and 30-years 83%, the paper said. Data from Refinitiv Municipal Market Data as of 3:00 p.m. ET. ICE Data Services was 62% two years, 62% three years, 62% five years, 67% 10 years, and 84% 30 years as of 4 p.m.
Mr Wong said that since the first rate cut in September, two-year interest rates have increased by 2.25 percentage points, while five-year and 10-year interest rates have increased by 4.1 percentage points and 3.5 percentage points, respectively.
He said the 30-year ratio “swung in Muniz’s favor” by 3.1 percentage points.
Despite another outsized new issue calendar with over $10 billion in supply, “strong demand from reinvested cash on October 1st and another week of large inflows will tighten the ratio. ,” Birch Creek strategists said.
Muni mutual funds received about $1.9 billion in inflows, the largest weekly inflow this year, according to LSEG Lipper. Wong said this was the 14th consecutive week of inflows as “investors continue to flow into municipal bond funds to capture higher yields before the Fed decides to cut rates further this year.” Ta.
Birch Creek strategists said their clients listed fewer sales last week than usual, with 20-year bonds seeing the biggest decline.
“On the contrary, especially since the largest trades (last week) were not in the typical ultra-high-end bonds with extra-large term notes, but instead were heavily concentrated in A-rated and prepaid, that part of the curve saw a 20% increase in purchases. “Gasoline credits have jumped over,” they said.
With issuance estimated at $9.565 billion, issuance remains large this week, led by New York City taxable GOs at $1.5 billion and Connecticut GOs at $935 million. .
With several large deals already scheduled in the coming weeks, volumes are expected to remain strong during the election period. Bond buyers have a 30-day visible supply of $17.37 billion.
The New Jersey Transportation Trust Fund Authority is expected to price the $2.7 billion deal, consisting of $1.2 billion in 2024 program bonds and at least $1.5 billion in system bonds, during the week of Oct. 14.
The Nashville and Davidson Metropolitan Government plans to sell $787 million in three series of GO improvement bonds on October 16th.
The New York Transit Development Corporation plans to price its non-AMT and AMT John F. Kennedy International Airport Terminal 6 Special Facilities Redemption Bonds at $1.5 billion during the week of October 21st.
The New York City Interim Fiscal Office is scheduled to price $1.5 billion in future tax-subordinated debt the week of Oct. 21.
AAA scale
Refinitiv MMD size was reduced by 2-5 basis points to 2.64% (+4) for the one-year and 2.40% (+4) for the two-year. As of 3 p.m., the 5-year bond is 2.38% (+3), the 10-year bond is 2.67% (+5), and the 30-year bond is 3.60% (+3).
The ICE AAA yield curve has been lowered by 3-5 basis points to 2.70% (+3) in 2025 and 2.44% (+4) in 2026. The 5-year was 2.38% (+4) and the 10-year was 2.38% (+4). As of 4 p.m., it was 2.66% (+4) and the 30-year was 3.56% (+3).
The S&P Global Market Intelligence municipal curve has been lowered by 3 to 4 basis points. The one-year yield was 2.67% (+4) in 2025 and 2.40% (+4) in 2026. The 5-year was 2.36% (+3). ), as of 3 p.m., the 10-year bond yield was 2.65% (+3), and the 30-year bond yield was 3.56% (+3).
Bloomberg BVAL was lowered by 3-4 basis points. In 2025 it was 2.69% (+4) and in 2026 it was 2.44% (+3). The 5-year was 2.39% (+3), the 10-year was 2.65% (+4)) and the 30-year was 3.57% (+4) as of 4 p.m.
Government bonds were weak.
The 2-year UST yield was 3.992% (+7), the 3-year yield was 3.890% (+6), the 5-year yield was 3.863% (+5), and the 10-year yield was 4.025% (+6). Just before the closing price, the 20-year bond was 4.374% (+5) and the 30-year bond was 4.303% (+5).
Upcoming major New York City (Aa2/AA/AA/AA+) is scheduled to price its $1.5 billion taxable GO, fiscal 2025 Series D on Wednesday, which will be accompanied by an $820 million social sub Consists of Series D-1 bonds with maturities of 2049 and 2054. $680 million Subseries D-2 Notes, Series 2026-2044. Bohua Securities.
Connecticut (Aa3/AA-/AA-/AA+) plans to price its $935 million GO on Wednesday, consisting of $560 million in Series F bonds, series 2025 to 2038 . Social Series G Bonds $240 million, Series 2039-2044. $135 million Series H Notes (Series 2025-2034). Siebert Williams Shank.
The Philadelphia Industrial Development Authority (Aa2/AA//) on Tuesday plans to price its 2024 Series A Children’s Hospital of Philadelphia Project Hospital Revenue Bond at $550 million. JP Morgan.
The Maryland Stadium Authority (Aa2/AA//) on Tuesday plans to price the Build to Learn Revenue Bonds (Series 2026-2044, Term 2049, 2054) at $413.41 million. BofA Securities.
The New York State Housing Finance Agency (Aa1///) announced on Wednesday that state personal income tax sustainability revenue consists of $7.975 million in 2024 Series A-1 and $185.015 million in 2024 Series A-2. The bond price will be set at $259.99 million. Jeffries.
North Carolina’s Cabarrus County Development Authority (Aa1/AA+/AA+/AA+) on Thursday plans to price limited debt redemption bonds to be issued from 2025 to 2044 at $238,305,000. Bohua Securities.
The Georgia Housing Finance Agency (/AAA//) on Tuesday plans to price its single-family mortgage non-AMT income bonds at $203.6 million. Morgan Stanley.
The East Baton Rouge Parish Capital Improvement District (Aa2/AA+//) on Tuesday plans to price MOVEBR sales tax revenue bonds running from 2025 to 2048 at $199.44 million. Stifel.
Florida’s Pasco County School District (Aa3//AA/) on Tuesday plans to price its 2025-2039 sales tax revenue bonds at $197,195,000. Bohua Securities.
Aldine Independent School District of Texas (Aaa/AAA//) on Wednesday plans to price its PSF-insured unlimited tax school construction and repayment bonds, Series 2024B, at $183.74 million. Cabrera Capital Markets.
The Ohio Board of Higher Education Facilities (Baa1//A-/) on Wednesday priced the Xavier University 2024 Project Higher Education Facilities Revenue Repayment Bonds (series 2025-2042, periods 2049, 2054) at $108,093. The price is expected to be set at $5,000. RBC Capital Markets.
The Colorado Housing Finance Agency (Aaa/AAA//) announced on Tuesday the 2024 Series G-1, series 2026 through 2034, taxable single-family residential mortgage Class I bonds with periods 2036, 2039, 2044, and 2050. The price will be set at $163 million. RBC Capital Markets.
The Hampton Roads Transportation Accountability Board (Aa1/AA//) announced Tuesday that the Hampton Roads Transportation Fund Priority Lien Revenue Bonds (Series 2024A, Series 2030-2044, Term 2049, 2054, 2059, 2064) The price is expected to be set at $152.73 million. BofA Securities.
ORLANDO, Fla. (/AAA/AAA/) is set to price $149.27 million in water reclamation system revenue bonds Wednesday. The Notes consist of $132.18 million of Improved Notes, Series 2024A, Series 2025-2054. $17.09 million refinancing notes, Series 2024B, Series 2025-2032. Bohua Securities.
Mississippi Home Corp. (Aaa///) plans to price $125,815,000 in single-family mortgage revenue bonds on Tuesday, including $96,835,000 in non-AMT bonds, Series 2024E, Series 2029 ~ 2036, period 2039, 2044, 2049. , 2054. Taxable Amount $28.98 million, Series 2024F, Series 2025-2029, Period 2054. Wells Fargo.
The Arizona Board of Regents (Aa3/A+//) on Wednesday plans to price the University of Arizona SPEED revenue repayment bonds insured by BAM at $115.2 million. Morgan Stanley.
The California Department of Municipal Finance on Tuesday plans to price the PRS California Obligated Group Projects proceeds and refinancing bonds at $112,135,000, including $88,085,000 in series 2024A and $88,085,000 in series 2024B-1. 9 million dollars, and Series 2024B-2 is 15.05 million dollars. Ziegler.
The Knoxville Metropolitan Area Airport Authority (A3/A//) plans to price $111,015,000 in airport revenue bonds. The notes consist of $69.49 million of non-AMT notes, series 2024A, series 2028-2044, terms 2049, 2054. and taxable amount of $41,525,000, Series 2024B, Series 2027-2039, Periods 2044, 2054. BofA Securities.
Washington State University (Aa3/A+//) will set a $105,975,000 general fund price on Tuesday to redeem serial past-due bonds from 2027 to 2040. Barclays Capital.
Competitiveness:
The New York State Highway Authority (Aa3/A+//) plans to sell $521.75 million in general fund refinancing bonds at 11:15 a.m. ET on Tuesday.
Jersey City, N.J., plans to sell $181.45 million in bond anticipation bonds at 11 a.m. Tuesday.
Washoe County, Nevada (Aa3/AA//) is scheduled to sell $110,515,000 in general obligation bonds at 10:45 a.m. Tuesday.
Nevada’s Clark County School District (A1/AA-//) will sell $400 million in limited general tax bonds at 11:30 a.m. Eastern Thursday.
