Finance

"There was strong demand for the Pennsylvania Housing Finance Authority deal, which was three times oversubscribed," said a New York trader.

The JPMorgan Chase CEO said the Federal Reserve's rate hikes might need to go beyond what's currently expected, but he's in favor of a pause to see the full impact of last year's increases.

This week's "manageable" calendar will continue what has been a quiet start to the new year in the municipal market, according to John Mousseau, president and chief executive officer and director of fixed income at Cumberland Advisors.

Investors will be greeted Monday with a new-issue calendar estimated at $4.303 billion.

Outflows continued as Refinitiv Lipper reported $2.477 billion was pulled from municipal bond mutual funds in the week ending Wednesday after $1.946 billion of outflows the week prior.

California's state water board asked IBank to issue $650 million in water revenue bonds.

The muni market "is being teed up to enter 2023 from a relative position of strength," said Jeff Lipton, managing director of credit research at Oppenheimer Inc.

"Bond investors bid a not-so-fond farewell to 2022 as they look forward to a much more attractive 2023," said Bryce Doty of Sit Investment Associates.

The value of the municipal bond market decreased by 4.3% in the third quarter of 2022, said Pat Luby, a strategist at CreditSights.

Outflows continued as Refinitiv Lipper reported $1.946 billion was pulled from municipal bond mutual funds in the week ending Wednesday after $3.094 billion of outflows in the prior week.

"With only a few days remaining in the year, muni bonds have had a tough year losing roughly 8.44% for the year," said Jason Wong, vice president of municipals at AmeriVet Securities.

"Although late-year volumes may be smaller, the market tone is holding firm on the premise of no supply/rollover demand — somewhat typical for December but noteworthy for the level of volatility the market has endured," said Kim Olsan, senior vice president of municipal bond trading at FHN Financial.

Munis were unchanged Friday heading into the Christmas hiatus as light trading preceded the early market close, according to Michael Pietronico, chief executive officer at Miller Tabak Asset Management. 

Outflows continued as Refinitiv Lipper reported $3.094 billion was pulled from municipal bond mutual funds in the week ending Wednesday after $1.217 billion of outflows the week prior.

"A fade in muni prices came on the heels of sovereign debt actions, leaving ratios subject to some correction with just a few sessions remaining in 2022," said Kim Olsan, senior vice president of municipal bond trading at FHN Financial.

Arizona's second-largest city reported general fund surpluses in recent years, easing structural budget balance concerns that weighed on its ratings, Fitch said.

Secondary selling pressure was concentrated most heavily on the one-year Tuesday, but sellers pushed yields higher across the curve by five to seven. Bids wanteds were on the rise again with Monday's total hitting $2.122 billion.

S&P Global Ratings raised the state flagship university's rating to AA-minus from A-plus.

"Yield levels are now notably higher throughout many sectors of the yield curve by a number of percentage points," said Morgan Stanley strategists Matthew Gastall and Daryl Helsing.

Moody's dropped Sparrow Health's rating a notch as it's not yet factoring in the financial and operational benefits of its acquisition by UM Health, which won't extent to a debt guarantee.