Municipals were little changed Monday after struggling last week, as U.S. Treasuries were narrowly mixed and equities ended up.
Last week saw "supply outweigh demand, [consumer price index] data struggle to meet the Fed's targeted pace, President [Donald] Trump's threats of tariffs, and anticipated layoffs ... sent the markets spiraling," said Jason Wong, vice president of municipals at AmeriVet Securities.
Losses month-to-date are 1.41%, all but erasing any gains this year as munis are now returning 0.07% in 2025, he said.
With one of the biggest selloffs in the past two years, muni yields rose "sharply" last week, by an average of 15.1 basis points, with the long-end of the curve seeing cuts of around 20 basis points, Wong said.
The two-year municipal to UST ratio Monday was at 65%, the five-year at 68%, the 10-year at 72% and the 30-year at 91%, according to Municipal Market Data's 3 p.m. EST read. ICE Data Services had the two-year at 65%, the five-year at 68%, the 10-year at 72% and the 30-year at 90% at 4 p.m.
Munis are at their cheapest valuation versus USTs in over a year as long-dated munis are around 90%. Thirty-year muni ratios have been hovering around 84% over the past year, he said.
Ten-year munis are seeing a similar trend: since January 2024 ratios have averaged 65.36%, and as of today, we are at 72%, the cheapest level since September 2024, according to Wong.
Dealers noted these levels "sparked some interest as a variety of buyers began creeping back in late in the week," Birch Creek strategists said.
Muni mutual funds saw $373 million of outflows, all of which "came at the expense" of investment-grade funds, according to LSEG Lipper.
This led to a surge in customer sale lists, as there was a 31% jump in bid wanteds throughout the week, Birch Creek strategists said, citing J.P. Morgan.
Concurrently, secondary purchases fell as "customers focused on new issues that had to come cheap in order to clear the market," they said.
Issuance is currently up 16.7% year-over-year — just shy of the $100 billion mark — showing the "uphill battle" the market faces, especially if fund flows "stall out," Birch Creek strategists said.
"While volatility isn't likely to disappear any time soon and munis face a weak technical environment over the coming weeks … investors who scoop up cheap paper in this environment will be rewarded over the longer term," they said.
In the primary market Monday, J.P. Morgan held a one-day retail order for the Metropolitan Transportation Authority's (A3/A-/AA/AA/) $1.073 billion of climate bond certified transportation revenue refunding green bonds, Series 2025A, with 5s of 11/2029 at 3.13%, 5s of 2030 at 3.23%, 5s of 2035 at 3.67%, 5s of 2040 at 4.10%, 5s of 2045 at 4.52%, 4.625s of 2050 at 4.82% and 5.25s of 2055 at 4.76%, callable 5/15/2035.
AAA scales
MMD's scale was little changed: The one-year was at 2.61% (unch) and 2.62% (unch) in two years. The five-year was at 2.80% (unch), the 10-year at 3.12% (unch) and the 30-year at 4.20% (-1) at 3 p.m.
The ICE AAA yield curve was little changed: 2.65% (unch) in 2026 and 2.64% (unch) in 2027. The five-year was at 2.79% (-1), the 10-year was at 3.11% (unch) and the 30-year was at 4.17% (unch) at 4 p.m.
The S&P Global Market Intelligence municipal curve was bumped up to three basis points on the short-end: The one-year was at 2.62% (-3) in 2025 and 2.63% (-3) in 2026. The five-year was at 2.78% (unch), the 10-year was at 3.12% (unch) and the 30-year yield was at 4.18% (unch) at 4 p.m.
Bloomberg BVAL was little changed: 2.55% (unch) in 2025 and 2.62% (unch) in 2026. The five-year at 2.77% (unch), the 10-year at 3.06% (-1) and the 30-year at 4.16% (-1) at 4 p.m.
Treasuries were narrowly mixed.
The two-year UST was yielding 4.058% (+4), the three-year was at 4.036% (+3), the five-year at 4.101% (+1), the 10-year at 4.307% (-1), the 20-year at 4.636% (-2) and the 30-year at 4.602% (-2) near the close.
Primary to come
The Alabama Federal Aid Highway Finance Authority (Aa2/AAA//) is set to price Tuesday $608.455 million of special obligation revenue bonds, consisting of $250 million of Series 2025A, serials 2026-2045, and $358.455 million of Series 2025B, serials 2026-2036. BofA Securities.
The San Diego Unified School District (Aa2//AAA/AAA/) is set to price Tuesday $509.18 million of GO refunding bonds, consisting of $108.2 million of Series R-8A, $40.45 million of Series R-8B, $30.305 million of Series SR-5A, $46.705 million of Series SR-5B, $253.025 million of Series ZR-6A and $30.495 million of Series ZR-6B. Jefferies.
The Pennsylvania Economic Development Financing Authority (A2/A/A/) is set to price Wednesday $387.3 million of fixed-rate mode UPMC revenue refunding bonds, Series 2025B, serials 2026-2045, terms 2050, 2055. RBC Capital Markets.
The authority is also set to price Wednesday $312.55 million of term-rate mode UPMC revenue bonds, Series 2025A. Barclays.
Core Natural Resources is set to price Wednesday $98.1 million of non-rated AMT solid waste disposal facility revenue bonds through the Pennsylvania Economic Development Financing Authority, $102.865 million of non-rated none-AMT port facilities refunding revenue bonds through the Maryland Economic Development Corp. and $106.355 million of non-rated AMT solid waste disposal facility revenue bonds through the West Virginia Economic Development Authority. Jefferies.
The Grossmont Healthcare District, California, (Aa2///) is set to price Tuesday $166.105 million of 2025 GO refunding bonds, Series F, serials 2025-2027, 2032-2040. Goldman Sachs.
The Illinois Housing Development Authority (Aaa///) is set to price Tuesday $150 million of non-AMT social revenue bonds, 2025 Series A, serial 2036, terms 2045, 2050, 2055. Barclays.
The Public Finance Authority (/BBB-//) is set to price Thursday $145.16 million of Lindenwood Education System educational facilities revenue bonds, consisting of $130.16 million of tax-exempt Series 2025A bonds, serials 2025-2035, term 2040; and $15 million of taxable Series 2025B bonds, serials 2027-2029 RBC Capital Markets.
The Arlington Higher Education Finance Authority (Aaa/AAA//) is set to price Tuesday $139.35 million of PSF-insured Riverwalk Education Foundation education revenue bonds, serials 2026-2045, terms 2050, 2055, 2060. Baird.
The Janesville School District (Aa2///) is set to price Tuesday $139.3 million of GO promissory notes, Series 2025B, serials 2026-2045. Baird.
Hamilton County, Ohio, (Baa3/BBB-//) is set to price Thursday $137.225 million of UC Health hospital facilities revenue refunding bonds, Series 2025A, serials 2030-2045, term 2051. RBC Capital Markets.
UC Health (Baa3/BBB-//) is set to price Thursday $122.464 million of taxable corporate CUSIPs, Series 2025B, serials 2035,2040. RBC Capital Markets.
The Illinois Housing Development Authority (Aaa///) is set to price Tuesday $116.665 million of taxable social revenue bonds, 2025 Series B, serials 2026-2037, term 2041. Loop Capital Markets.
Competitive
The Dormitory Authority of the State of New York is set to sell $2.041 billion of general purpose state personal income tax revenue bonds in five series: $577.68 million of tax-exempt Series 2025A Bidding Group 1 bonds at 10:15 a.m. Thursday; $533.915 million of tax-exempt Series 2025A Bidding Group 2 bonds at 10:45 a.m. Thursday; $437.43 million of tax-exempt Series 2025A Bidding Group 3 bonds at 11:15 a.m. Thursday; $435.43 million of tax-exempt Series 2025A Bidding Group 4 bonds at 11:45 a.m. Thursday; and $56.965 million of taxable Series 2025B bonds at 12:15 p.m. Thursday.
New York is set to sell $541.145 million of GOs in three series: $339.285 million of tax-exempts, Series 2025A, at 10:15 a.m. Tuesday; $193.35 million of tax-exempt refunding bonds, Series 2025C, at 10:45 a.m. Tuesday; and $8.51 million of taxables, Series 2025B, at 11:15 a.m. Tuesday.
Wake County, North Carolina, is set to sell $271.845 million of GO public improvement bonds, Series 2025A, at 11 a.m. Tuesday.
The Franklin Public School District, Wisconsin, is set to sell $145 million of GO school facility improvement bonds, Series 2025A, at 10:30 a.m. Wednesday.
