Municipals were slightly weaker Monday as U.S. Treasury yields rose in sympathy and equities ended mixed.
The two-year muni-UST ratio Monday was at 60%, the five-year at 62%, the 10-year at 75% and the 30-year at 94%, according to Municipal Market Data's 3 p.m. ET read. ICE Data Services had the two-year at 59%, the five-year at 63%, the 10-year at 74% and the 30-year at 94% at a 4 p.m. read.
The muni market entered the "summer doldrums" last week as new issue activity started to slow and investor cash dwindled, said Birch Creek strategists.
Munis were relatively unchanged, with some slight weakness out long, as the asset class outperformed USTs with the 10-year muni-to-Treasury ratio yielding 73.76%, compared to the previous week's 74.02%, said Jason Wong, vice president of municipals at AmeriVet Securities.
Muni mutual funds saw $180 million of outflows last week, following $1.656 billion of inflows the week prior. Investment-grade mutual funds saw outflows of $90 million, and high-yield funds saw outflows of $18 million, according to LSEG Lipper.
Returns for the month so far are at 0.60%, pushing the market "back into positive territory for the year with returns of 0.05%," Wong said.
With the end of August approaching, and "an expected light calendar for the rest of the month," Wong noted "we could expect to see lower yields and a positive return for August," adding that year-to-date returns could return to negative territory in September, ahead of a possible rate cut.
"If unfavorable economic numbers (employment, CPI [and] PPI) are released next month, we should expect a hold on any rate cuts and a possible rate hike to follow, putting a damper on any positive returns for the rest of the year," he said.
For investment-graded munis, "activity slowed in the back half of the week after [T]reasuries began to reverse course, and was exacerbated by several new issues that were left with unsold balances," Birch Creek strategists said.
Dealers additionally reported "the market felt a bit weaker than the MMD moves implied," but this week's lighter primary issuance calendar and a "fresh round of mid-month reinvestment cash may help buoy sentiment," according to Birch Creek.
This week's calendar is estimated at $6.166 billion, led by a $1.388 billion of building aid and revenue bonds from the New York City Transitional Finance Authority.
In the HY market, many were "relieved to learn that the majority holders of
With the contagion risk off the table, HY activity mostly followed the Treasury market's lead, up a few basis points after
In the primary market Monday, Cabrera Capital Markets priced for the Austin Independent School District, Texas, (Aaa///AAA/) $238 million of PSF-insured unlimited tax school building bonds, with 5s of 2026 at 2.31%, 5s of 2030 at 2.60%, 5s of 2035 at 3.49%, 5s of 2040 at 4.19%, 5.25s of 2045 at 4.62% and 5.25s of 2050 at 4.81%.
Siebert Williams Shank priced for the Southeast Overtown/Park West Community Redevelopment Agency (/A-//) $162.72 million of tax increment revenue bonds. The first tranche, $142.985 million of Series 2025A bonds, saw 5s of 3/2026 at 2.61%, 5s of 2030 at 2.84%, 5s of 2035 at 3.73%, 5s of 2040 at 4.52% and 5.25s of 2042 at 4.70%, callable 3/2035.
The second tranche, $19.735 million of Series 2025B refunding bonds, saw 5s of 3/2026 at 2.61% and 5s of 2030 at 2.84%, noncall.
AAA scales
MMD's scale was cut up to three basis points: The one-year was at 2.23% (unch) and 2.25% (unch) in two years. The five-year was at 2.41% (unch), the 10-year at 3.26% (+2) and the 30-year at 4.63% (+3) at 3 p.m.
The ICE AAA yield curve was cut one to two basis points: 2.23% (+1) in 2026 and 2.21% (+1) in 2027. The five-year was at 2.42% (+1), the 10-year was at 3.18% (+2) and the 30-year was at 4.60% (+1) at 4 p.m.
The S&P Global Market Intelligence municipal curve was cut up to three basis points: The one-year was at 2.22% (unch) in 2025 and 2.24% (unch) in 2026. The five-year was at 2.40% (unch), the 10-year was at 3.26% (+3) and the 30-year yield was at 4.62% (+3) at 4 p.m.
Bloomberg BVAL was cut up to three basis points: 2.22% (unch) in 2025 and 2.24% (unch) in 2026. The five-year at 2.39% (unch), the 10-year at 3.20% (+3) and the 30-year at 4.60% (+2) at 4 p.m.
Treasuries were slightly weaker.
The two-year UST was yielding 3.768% (+2), the three-year was at 3.729% (+1), the five-year at 3.853% (+2), the 10-year at 4.338% (+2), the 20-year at 4.916% (+2) and the 30-year at 4.94% (+2) near the close.
Primary to come
The New York City Transitional Finance Authority (Aa2/AA/AA/) is set to price Wednesday $1.388 billion of building aid revenue bonds, consisting of $868.09 million of Fiscal 2026 Series S-1, $500.61 million of Fiscal 2026 Series S-2, and $19.02 million of Fiscal 2026 Series S-3. RBC Capital Markets.
The Los Angeles County Public Works Financing Authority (/AA+/AA+/) is set to price Wednesday $826.315 million of lease revenue bonds, Series 2025J. BofA Securities.
The Philadelphia Housing Authority (/AA-/AA/) is set to price Tuesday $302.515 million of guaranteed revenue bonds (PHADC Acquisition Program), Series 2025A. PNC.
The Capital Trust Authority is set to price $149.96 million of unrated senior living facilities revenue bonds (Grand Villa Portfolio Project), consisting of $143.18 million of Series 2025A and $6.78 million of Series 2025T. Mesirow Financial.
The Port Arthur Independent School District, Texas, (Aaa///) is set to price Thursday $147.2 million of PSF-insured unlimited tax school building bonds. SAMCO Capital Markets.
The Clovis Unified School District, California, (/AA//) is set to price Tuesday $134.195 million of GOs, consisting of $125 million of Series A bonds and $9.195 of Series 2025 refunding bonds. Stifel.
The Public Finance Authority (Aa3///) is set to price Tuesday $134.19 million of municipal certificates (Cuyahoga River Capital Portfolio), Series 2025-1, Class A. J.P. Morgan.
Garland, Texas, (/AA+/AA+/) is set to price Tuesday $131.115 million of taxable GO pension bonds. Piper Sandler.
The Maine State Housing Authority (Aa1/AA+//) is set to price Tuesday $125 million of social mortgage purchase bonds, Series 2025C. Barclays.
The Mississippi Home Corp. (Aa1///) is set to price Tuesday $123.955 million of single-family mortgage revenue bonds, consisting of $100 million of non-AMT Series 2025C bonds and $23.955 million of taxable Series 2025D bonds. Wells Fargo.
The Montana Facility Finance Authority (//A+/) is set to price Thursday $113.4 million of revenue bonds (Benefis Health System Obligated Group), consisting of $63.4 million of Series 2025A and $50 million of Series 2025B. Barclays Capital.
The Saratoga County Capital Resource Corp. (/AA-//) is set to price Tuesday $109.845 million of tax-exempt lease revenue bonds (WSWHE BOCES Project). KeyBanc Capital.
The Beaver Water District of Benton and Washington Counties, Arkansas, ( /AA+//) is set to price Tuesday $100.185 million of water revenue bonds. Crews & Associates.
Competitive:
The Louisville/Jefferson County Metro Government Board of Water Works (Aaa/AAA//) is set to sell $231.05 million of water system revenue bonds at 11 a.m. Eastern Thursday.
Minneapolis, Minnesota, is set to sell
Madison, Wisconsin, is set to sell $130.065 million of GO promissory notes, Series 2025D, at 11 a.m. Tuesday.
