Municipals were slightly firmer Monday, underperforming a U.S. Treasury rally, as equities sold off.
The market rally "took a bit of a breather last week, with yields rising across the curve," said Daryl Clements, a portfolio manager at AllianceBernstein.
"Volatility remained a theme as the fixed-income markets attempted to digest the barrage of policy-related headlines," he said.
And "as the economic picture does not appear to be getting clearer any time soon, we suspect the muni market will struggle for direction," Birch Creek strategists said.
Munis saw cuts across last past week with "yields in front-end seeing cuts of about 2.5 basis points, the belly of the curve seeing cuts of 7 basis points, and the long end seeing the largest cuts at 10 basis points," said Jason Wong, vice president of municipals at AmeriVet Securities.
However, muni yields firmed Monday, bumped up to three basis points across the curve.
Munis continued to cheapen compared to Treasuries over the past week by 0.41-0.76 percentage points across the curve, with the two-year ratio cheapening the most, he said.
The two-year municipal to UST ratio Monday was at 65%, the five-year at 67%, the 10-year at 70% and the 30-year at 89%, according to Municipal Market Data's 3 p.m. EST read. ICE Data Services had the two-year at 64%, the five-year at 65%, the 10-year at 68% and the 30-year at 85% at 4 p.m.
"The muni market did modestly underperform [last week] on a relative basis, with after-tax spreads widening (albeit modestly) over the week, Clements said, noting it's not that surprising given that March historically has been a challenging month for munis.
Furthermore, the market will likely need more underperformance for crossover buyers to return, Birch Creek strategists noted.
Elsewhere, fund flows remained positive, with investment-grade funds taking in $190 million, but "dealers reported most mutual fund buyers remain on strike while [separately managed accounts] are turning more selective," they said.
"As customers sought to take advantage of stale evaluations and reinvest in much cheaper new issue, [bids wanted] surged throughout the week while secondary purchases fell," Birch Creek strategists said.
Issuance was elevated last week. But in the primary market, new issues were "mixed" as specialty states and different names performed well, but sectors, like healthcare and longer-duration national names, struggled, they said.
Supply remains robust this week at $10.4 billion, led by the
The competitive calendar is led by
And for the rest of the month, volume will remain healthy.
Next week, will see $2.3 billion of Dormitory Authority of the State of New York personal income tax revenue bonds in the competitive market, and $700 million of New York Metropolitan Transportation Authority revenue refunding green bonds and $612 million of Alabama Federal Aid Highway Financial Authority special obligation revenue bonds, the latter two in the negotiated market.
The week of March 24, will see up to $1.5 billion of Los Angeles International Airport subordinate revenue and refunding revenue bonds, followed by $600 million of New York City Municipal Water Finance Authority water and sewer system second general resolution revenue bonds.
AAA scales
MMD's scale was bumped up to three basis points: The one-year was at 2.52% (-2) and 2.53% (-3) in two years. The five-year was at 2.69% (-2), the 10-year at 2.96% (unch) and the 30-year at 4.05% (unch) at 3 p.m.
The ICE AAA yield curve saw small bumps throughout most of the curve: 2.58% (+1) in 2026 and 2.55% (-2) in 2027. The five-year was at 2.68% (-2), the 10-year was at 2.93% (-2) and the 30-year was at 3.93% (-2) at 4 p.m.
The S&P Global Market Intelligence municipal curve was bumped up to two basis points: The one-year was at 2.56% (-2) in 2025 and 2.57% (-2) in 2026. The five-year was at 2.66% (-2), the 10-year was at 2.96% (unch) and the 30-year yield was at 3.94% (unch) at 4 p.m.
Bloomberg BVAL was bumped one to two basis points: 2.47% (-2) in 2025 and 2.54% (-2) in 2026. The five-year at 2.66% (-2), the 10-year at 2.92% (-2) and the 30-year at 3.96% (-1) at 4 p.m.
Treasuries were firmer.
The two-year UST was yielding 3.9% (-10), the three-year was at 3.906% (-10), the five-year at 3.981% (-11), the 10-year at 4.218% (-9), the 20-year at 4.579% (-7) and the 30-year at 4.546% (-5) near the close.
Primary to come
The New York City Transitional Finance Authority (Aa1/AAA/AAA/) is set to price Wednesday $1.5 billion of future tax secured tax-exempt subordinate bonds, Fiscal 2025 Series H, Subseries H-1, serials 2026-2052. Wells Fargo.
The Black Belt Energy Gas District (Baa1/NR/NR/NR/) is set to price $913.95 million of gas project revenue bonds, 2025 Series B. Goldman Sachs.
The Board of Regents of the University of Texas System (Aaa/AAA/AAA/) is set to price Thursday $650 million of permanent university fund bonds, Series 2025A. Jefferies.
Ohio (Aaa///) is set to price Tuesday $500 million GOs, consisting of $300 million of common schools GOs, Series 2025A, serials 2026-2044, and $200 million of infrastructure improvement GOs, Series 2025A, serials 2026-2044. RBC Capital Markets.
The Massachusetts Development Finance Agency (Aa3/AA-/NR/NR/) is set to price Tuesday $377.22 million of Boston College issue revenue refunding bonds, Series W, serials 2026-2042, terms 2057, 2057. Barclays.
The Stamford Housing Authority is set to price Wednesday $347.665 million of Mozaic Concierge Living Project revenue bonds, consisting of $155.996 million of Series A, $29.615 million of Series B, $61.45 million of Series C, $98.89 million of Series D and $1.755 million of Series E. HJ Sims.
Northwestern University (Aa1/AA+/NR/NR/) is set to price Tuesday $300 million of taxable corporate CUSIPS. Barclays.
The New York City Housing Development Corp. (Aa2/AA+//) is set to price Tuesday $242.82 million of sustainable development multi-family housing revenue bonds, consisting of $135.095 million of Series A-1, serials 2030-2037, terms 2040, 2045, 2050, 2055, 2060, 2064, and $107.725 million of Series A-2, term 2064. Loop Capital Markets.
Miami-Dade County, Florida, (Aa2//AA+/) is set to price Tuesday $220.535 million of Jackson Health System public facilities revenue and revenue refunding bonds, serials 2026-2036, 2040-2055. PNC Capital Markets.
The Desert Sands Unified School District, California, (Aa2/AA//) is set to price Tuesday $200.24 million of GOs, consisting of $150 million of Election of 2024 GOs and $50.24 million of refunding GOs. Piper Sandler.
The Public Finance Authority, Wisconsin, is set to price Tuesday $196.176 million of non-rated Texas Infrastructure Authority Program tax-exempt revenue anticipation improvement and refunding bonds. Piper Sandler.
Louisiana (Aa2/AA//AA/) is set to price Tuesday $179.07 million of GO refunding bonds, Series 2025-A, serials 2025-2037. Raymond James.
Acts Retirement-Life Communities Obligated Group (//A-/) is set to price Tuesday $161.61 million of revenue bonds, consisting of $99.445 million of Series 2025A and $52.165 million of Series 2025B. Ziegler.
The Toledo Lucas County Public Library, Ohio, (Aa2///) is set to price Tuesday $153 million of unlimited tax GO library improvement bonds, consisting of $80 million of Series 2025A bonds, serial, 2044, term 2049, 2054, and $73 million of taxable, serials 2025-2044. Stifel.
The Utah Housing Corp. (Aa2/NR/NR/NR/) is set to price Tuesday $140 million of taxable single-family mortgage bonds, 2025 Series D, serials 2026-2037, terms 2040, 2045, 2050, 2055, 2055. Jefferies.
Wisconsin (NR/AAA/NR/AAA/) is set to price Tuesday $124.375 million of transportation revenue refunding bonds, 2025 Series 1. Jefferies.
The Public Finance Authority is set to price Wednesday $102.33 million of KSU Bixby Real Estate Foundation Project student housing revenue bonds, consisting of $55.43 million of Series 2025A (Baa1///), serials 2025-2040, terms 2045, 2050, 2055; $27.245 million of Series 2025B (Baa2///), serials 2030, 2035, 2045, 2055; and $19.655 million of Series 2025C (Ba1///), serials 2035, 2045, 2055. Raymond James.
Texas (Aaa///) is set to price Tuesday $100 million of taxable veterans land bonds, Series 2025A, term 2056. Jefferies.
Competitive
Illinois is set to sell $725 million of junior obligation Build Illinois Bonds in three series, consisting of $276 million of Series A of March 2025 at 10:45 a.m. Tuesday, $231 million of Series B of March 2025 at 11:45 a.m. Tuesday, and $218 million of Series C of March 2025 at 11:15 a.m. Tuesday.
The Triborough Bridge and Tunnel Authority is set to sell $400 million of payroll mobility tax bond anticipation notes, Series 2025A, at noon Tuesday.
Baltimore County is set to sell $179 million GO metropolitan district bonds (86th Issue) at 10:30 a.m. Tuesday, $168 million of GO consolidated public improvement bonds at 11 a.m. Tuesday.
The county is also set to sell $125 million of Equipment Acquisition Program certificates of participation at 11:30 a.m. Tuesday.
Hayward, California, is set to sell $125 million of 2025 wastewater revenue bonds at noon Tuesday.
The Kansas Development Finance Authority is set to sell $167.15 million of tax-exempt and taxable athletics facilities revenue bonds, at 10:30 a.m. Thursday.
Mercer County, New Jersey, is set to sell $139.91 million of bond anticipation notes, Series 2025A, at 11 a.m. Thursday.
