Markets

Until supply comes, market participants appear to be content to sit back and let the calendar flip to a new year without making any big moves.

Industry advocates want to preserve allocation of private activity bonds to the states and help Congress understand the benefits of advance refunding.

Municipals are sitting out the ups and downs in equities and UST, with $12 million scheduled for the primary in the final week of 2021.

Tax risks continue to linger as they are preserved as a potential offset for whatever level of spending all 50 Democratic senators can agree to, but potential approval of the legislation remains a question mark.

U.S. Treasuries saw losses pushing municipal to UST ratios on the 10- and 30-year lower again.

An influx of federal funds contributed to the stable outlook.

The Build Back Better in its current form essentially has been killed by Sen. Joe Manchin, likely limiting the potential for tax hikes in the coming year.

Municipal volume is estimated at a lean $558.8 million with $494.7 million of negotiated deals and $64.2 million on the competitive slate. Thirty-day visible supply is at $3.17 billion.

“Our state’s strong economic recovery has accelerated back to pre-pandemic levels for unemployment and GDP,” said Gov. Bill Lee.

Despite outside pressures, municipal fundamentals are strong with improving credit pictures, issuers flush with federal cash and the ongoing supply-demand imbalance.