Munis were slightly cheaper on Wednesday. U.S. Treasuries were little changed, and equities ended down.
Muni yields were cut by up to two basis points, depending on the scale. UST yields rose up to two basis points.
James Pruskowski, managing director at Hennion & Walsh, attributed the month's rough start to the war with Iran, recent tensions in the Strait of Hormuz and Wednesday's hawkish comments from the Federal Reserve Chairman Kevin Warsh.
The muni market, "after record June supply, is ready for a long weekend," Pruskowski said. However, the market's characteristic summer strength will likely begin soon, and it has "one of the strongest setups I've seen in at least a decade."
"You have fund inflows and expanding [separately managed accounts] driving the market demand; whereas fast money accounts, that are relative-value driven, the ratio environment continues to sideline them, because it's an expensive hedge," Pruskowski said. "Between high supply that's being supported by a quite healthy demand base, the market's set to perform. I think the fundamental backdrop to the rates market is going to lend support; it's just going to be slow to materialize."
ICI data
The Investment Company Institute Wednesday reported inflows of $853 million for the week ending June 24, following $1.233 billion of inflows the previous week. This marks the first time in nine weeks inflows have been below $1 billion.
Exchange-traded funds saw inflows of $427 million after $1.799 billion of inflows the week prior, per ICI data.
New-issue market
In the primary market Wednesday, J.P. Morgan priced for the Black Belt Energy Gas District (Aa2///) $916.94 million of gas project revenue bonds, Series 2026G, with 5s of 6/2027 at 3.16% and 5s of 2031 at 3.77%.
