Markets

Municipal yields rose as much as five basis points on the long end, but the losses were not as pronounced as UST. Light dealer inventories and scarce secondary trading let munis outperform Treasuries.

The Conference Board's Employment Trends Index (ETI) gained to 97.57 in October from 96.33 in September, but remains 11.1% lower than a year ago, the group announced Monday.

As the week drew to a close, municipal bond market participants looked ahead to a smaller-than-usual supply slate dominated by revenue bond deals.

The October employment report was stronger than predicted, with a 638,000 rise in nonfarm payrolls and a full percentage point decline in the unemployment rate, suggesting the economy continues to improve despite the rise in the number of COVID-19 cases.

To little surprise, the Federal Reserve left interest rates unchanged. Refinitiv Lipper reported tax-exempt muni bond funds lost about $954 million.

TMI Trust agreed to a settlement that allows bondholders to be paid interest during the Chapter 11 case of the Roman Catholic Archdiocese of New Orleans.

Gov. J.B. Pritzker says preservation of the investment-grade status is "very important;" Illinois bonds traded wider after the income tax referendum failed.

Top-rated muni yields fell by as much as 10 basis points on the AAA curves on Wednesday the largest move better for the market since late April, early May. ICI reported $1.2B of muni bond fund inflows.

Both the ADP employment report and the ISM services PMI came in below estimates, suggesting weakness in the recovery.

Their wins brighten the future of municipal bond-friendly initiatives in Congress.