Markets

"March is not an overly positive month for munis, but a lot will depend on U.S. Treasuries," said Barclays strategist Mikhail Foux.

The $550 million deal from an issuer with two triple-A ratings includes about $250 million for refunding and an $85 million taxable piece.

"Markets fixate on one risk at a time, and there's no shortage right now. Volatility has spiked, liquidity is thin, and buyers are sidelined — but that's temporary," said James Pruskowski, chief investment officer at 16Rock Asset Management.

Ordinances pending before the city council would authorize up to $325 million of interim financing that would be refunded with fixed-rate, 30-year bonds.

Investors like the 10-year area of the curve because "if they're buying duration, the tax-exempt market is usually going to be one of the best places to buy," said Wesly Pate, a senior portfolio manager at Income Research + Management.

Issuance remains heavy this week, but while it's elevated, the muni market is "structurally undersupplied," meaning if 2024's record level of $500 billion-plus of issuance was doubled, the market could still digest it quite well, said Wesly Pate, a senior portfolio manager at Income Research + Management.

The Texas city, which is considering an $800 million general obligation bond election next year, expects to issue nearly $400 million of debt in 2025.

Illinois will sell $725 million of junior sales tax revenue bonds in a competitive deal pricing Tuesday. The Build Illinois bonds will fund capital projects.

Short-end U.S. Treasuries rallied mid-morning, while UST yields were little changed out long, but ended the day weaker across most of the curve with the greatest losses out long. Munis were steady throughout the day.

The New York City Transitional Finance Authority plans to make an impact on the municipal market this month with $1.8 billion of bond sales.