Municipals were weaker Monday as U.S. Treasury yields rose five years and out and equities sold off.
"Coming off a volatile week ... where we saw yields rise considerably, munis strengthened this past week aligned in theme with Treasuries," said Jason Wong, vice president of municipals at AmeriVet Securities.
Following a week of yields rising by almost 100 basis points, munis were firmer last week, with yields falling an average of around 15.6 basis points as market volatility persists, he said.
Monday, though, saw a reversal from the past week as muni yields rose three to 10 basis points, depending on the curve. Despite this, Monday's losses were not enough to erase last week's gains as yields are still lower than they were two weeks ago.
The drop in yields can be credited to investors taking advantage of higher yields and significant secondary trading, Wong said.
Secondary trading remained elevated last week as volume was over $49 billion, he said.
"As with secondary trading volume being higher than average, bids-wanted continues to remain at elevated levels with just over $6.83 billion up for the bid," he said, citing Bloomberg data.
Ten-year muni-UST ratios richened by eight percentage points from year-to-date highs of April 9, Wong said.
The two-year ratio Monday was at 82%, the five-year at 81%, the 10-year at 79% and the 30-year at 92%, according to Municipal Market Data's 3 p.m. EDT read. ICE Data Services had the two-year at 81%, the five-year at 81%, the 10-year at 80% and the 30-year at 94% at 4 p.m.
However, munis are still cheaper overall from a year ago when the five-year and 10-year ratios were around 58%, he said.
Issuance remains robust this week at an estimated $14 billion, led by two $1 billion-plus deals from Connecticut and Massachusetts.
This comes after some deals were postponed or moved to the day-to-day calendar in the past two weeks because of tariff-induced market volatility. Those shelved deals are "selectively" coming to market, and most have not yet priced, said Troy Williams, co-head and senior portfolio manager of Easterly ROC Municipals.
Last week also saw some deals accelerated, including two deals that priced last Monday: Oregon and Hawaii County.
When these deals price — either those that were shelved or accelerated — depends on when the "temperature" is correct, Williams said.
However, issuers are not about to "jam a bunch of deals into a market that's not looking for it," even if demand outstrips supply, he said.
Issuers will be cautious, and there will be a "balancing act" with new deals, Williams said.
Outflows from muni mutual funds continued last week as investors pulled $1.258 billion following the prior week's outflow of $3.302 billion. This marks six straight weeks of outflows.
"When you have the volatility that we've seen the last couple of weeks, people hold their paycheck back and they say, 'I'm not going to buy munis right now,'" William said. "So you don't have some of the automatic flows in munis that you have in a lot of the other taxable fixed-income world, which is why you see the volatility of flows in munis."
However, he noted, inflows may soon return.
"Usually you get about a week of sort of consolidation and less volatility, then the money starts to come back again," Williams said.
AAA scales
MMD's scale was cut three to five basis points: The one-year was at 3.03% (+3) and 3.05% (+3) in two years. The five-year was at 3.18% (+3), the 10-year at 3.48% (+4) and the 30-year at 4.51% (+5) at 3 p.m.
The ICE AAA yield curve was cut nine to 10 basis points: 3.13% (+9) in 2026 and 3.10% (+9) in 2027. The five-year was at 3.20% (+9), the 10-year was at 3.51% (+10) and the 30-year was at 4.53% (+9) at 4 p.m.
The S&P Global Market Intelligence municipal curve was cut three to five basis points: The one-year was at 3.02% (+3) in 2025 and 3.04% (+3) in 2026. The five-year was at 3.18% (+3), the 10-year was at 3.49% (+4) and the 30-year yield was at 4.50% (+5) at 4 p.m.
Bloomberg BVAL was cut three to six basis points: 2.88% (+3) in 2025 and 2.95% (+3) in 2026. The five-year at 3.12% (+4), the 10-year at 3.45% (+4) and the 30-year at 4.51% (+6) at 4 p.m.
Treasuries saw losses five years and out.
The two-year UST was yielding 3.753% (-5), the three-year was at 3.776% (-2), the five-year at 3.965% (+3), the 10-year at 4.41% (+8), the 20-year at 4.949% (+12) and the 30-year at 4.914% (+12) near the close.
Primary to come
Connecticut (Aa3/AA-/AA-/AA+/) is set to price Wednesday $1.651 billion of GOs, consisting of $500 million of Series A bonds, serials 2026-2045, and $1.151 billion of Series B refunding bonds, serials 2025-2035. Barclays.
Massachusetts (Aa1/AA+/AA+/) is set to price Thursday $1.07 billion of GOs, consisting of $600 million of consolidated loan of 2025 Series A bonds, serials 2038-2055, and $470 million of 2025 Series A refunding bonds, serials 2028-2045. Jefferies.
The Los Angeles Unified School District (Aa2//AAA/AAA/) is set to price Wednesday $958.155 million of GOs, consisting of $426.38 million of U.S. Series A-1 bonds, serials 2028-2045, term 2049; $265.475 million of Series A refunding bonds, serials 2026-2030, 2033-2035, 2037-2040; $26.73 million of U.S. Series A-2, serial 2025; and $239.57 million of U.S. Series B bonds, serials 2026-2028. Raymond James.
Los Angeles (/AA-/AA/) is set to price Thursday $803.375 million of wastewater system subordinate revenue bonds, consisting of $197.135 million of Series A bonds, $145.475 million of taxable Series B bonds and $460.765 million of Series C refunding bonds. Goldman Sachs.
The New York City Municipal Water Finance Authority (Aa1/AA+/AA+/) is set to price Wednesday $673.05 million of water and sewer system second general resolution revenue bonds, Fiscal 2025 Series DD, serials 2028, 2033, 2035, 2037-2039. Siebert Williams Shank.
The North Carolina Department of State Treasurer (Aa3/AA//) is set to price Wednesday $439.79 million of grant anticipation revenue vehicle bonds and refunding bonds, serials 2026-2040. J.P. Morgan.
The Onondaga Civic Development Corp. (Aa3/AA-//) is set to price Tuesday $425 million of Syracuse University Project revenue bonds. RBC Capital Markets.
The Allegheny County Airport Authority (A2/AA/A/A+/) is set to price Tuesday $416.405 million of Assured Guaranty-insured
The Michigan Finance Authority (Aa3/AA//) is set to price Tuesday $375.895 million of Corewell Health bonds, consisting of $189.43 million of Series A, serials 2033-2037, 2039-2046; $93.235 million of Series B-1, term 2055; and $93.23 million of Series B-2, term 2055. J.P. Morgan.
The United Nations Development Corp. (/AA-/AA-/) is set to price Tuesday $365 million of taxable Series A bonds, serials 2031-2040, term 2055. Goldman Sachs.
Mesa, Arizona, (A1/AA//) is set to price Thursday $277.74 million of utility systems revenue obligations, serials 2026-2045, term 2049. BofA Securities.
The Illinois Finance Authority (A3//A-/) is set to price Thursday $271.98 million of Silver Cross Hospital and Medical Centers revenue refunding bonds, consisting of $201.98 million of Series A, $35 million of Series B-1 and $35 million of Series B-2. Barclays.
The Florida Local Government Finance Commission is set to price $231.19 million of non-rated Convivial Jacaranda Trace Project senior living revenue refunding bonds, consisting of $227.89 million of Series A and $3.3 million of Series B. Ziegler.
The Virginia Housing Development Authority (Aaa/AAA//) is set to price Tuesday $210 million of commonwealth mortgage bonds, consisting of $70 million of 2024 Series F non-AMT bonds, serials 2026-2036, terms 2040, 2045, 2050, 2055; and $140 million of taxable 2025 Series B bonds, serials 2026-2037, terms 2040, 2045, 2050, 2055. BofA Securities.
The National Finance Authority is set to price $199.775 million of non-rated special revenue bonds, serial 2033. Wells Fargo.
The Fort Bend Independent School District, Texas, (/AAA/AAA/) is set to price Tuesday $190.64 million of PSF-insured unlimited tax school building and refunding bonds, Series 2025A, serials 2026-2045, terms 2050, 2055. Siebert Williams Shank.
The Volusia County Educational Facilities Authority (A1//AA-/) is set to price Tuesday $185 million of Embry-Riddle Aeronautical University project educational facilities revenue bonds. Morgan Stanley.
The Sumner-Bonney Lake School District No. 320, Washington, (Aaa///) is set to price Tuesday $183.855 million of unlimited tax general obligation and refunding bonds, insured by the Washington State School District Credit Enhancement Program. Piper Sandler.
The Dormitory Authority of the State of New York (A3/A//) is set to price Thursday $165.31 million of Barnard College revenue bonds, Series 2025A, serials 2029-2045, terms 2050, 2055. Goldman Sachs.
The Hayward Unified School District, California, (A1/AA//) is set to price Tuesday $160.48 million of $54.215 million of GOs. RBC Capital Markets.
The Colorado Housing and Finance Authority (Aaa/AAA//) is set to price Wednesday $158.24 million of Class I taxable single-family mortgage bonds, Series H-1, serials 2026-2037, terms 2040, 2042, 2055. RBC Capital Markets.
The STC Metropolitan District No. 2, Colorado, In is set to price Tuesday $155.155 million, consisting of $87 million of Assured Guaranty-insured Series A1 bonds (A1/AA//), $46.445 million of Series A2 bonds (non-rated) and $21.71 million of Series B bonds (non-rated). D.A. Davidson.
The Phoenix Union High School District No. 210 (Aa1/AA/AAA/) is set to price Tuesday $151.235 million of school improvement bonds, Project of 2023, Series B, serials 2025-2032. Stifel.
The Fort Bend Independent School District, Texas, (/AAA/AAA/) is set to price Tuesday $143.835 million of PSF-insured variable rate unlimited tax school building and refunding bonds, Series 2025B. Baird.
Raleigh, North Carolina, (Aaa/AAA/AAA/) is set to price Thursday $143.355 million of GOs, consisting of $118.355 million of GO public improvement and refunding bonds, Series 2025A, serials 2026-2045, and $25 million of taxable GO housing bonds, Series 2025B, serials 2026-2040, term 2045. BofA Securities.
Waco, Texas, (Aa1/AA+//) is set to price Wednesday $125.02 million of combination tax and revenue certificates of obligation, serials 2026-2055. RBC Capital Markets.
The Gunnison County Housing Authority (/AA//) is set to price Tuesday $118.18 million of BAM-insured Whetstone Housing Project general revenue bonds, serials 2027-2045, terms 2047, 2050, 2055, 2059. Northland Securities.
The New Mexico Mortgage Finance Authority (Aaa///) is set to price Thursday $100 million of Class I tax-exempt non-AMT single-family mortgage program bonds, Series C, serials 2026-2037, terms 2040, 2045, 2050, 2055, 2056. RBC Capital Markets.
Competitive
Washington (Aaa/AA+/AA+/) is set to sell $349.63 million of various purpose GO refunding bonds, Series R-2025D, at 10:15 a.m. Wednesday and $139.685 million of motor vehicle fuel tax and vehicle-related fees GO refunding bonds, Series R-2025E, at 10:45 a.m. Wednesday.
Clark County School District, Nevada, (A1/AA-//) is set to sell $200 million limited tax GO building bonds, Series 2025A, at 11:30 a.m. Thursday.
The Virginia Public School Authority (Aa1/AA+/AA+/) is set to sell $190.27 million of school financing refunding bonds, Series 2025B, at 10:45 a.m. Tuesday.
