Munis were steady to firmer in spots ahead of a robust calendar that boasts four billion-dollar-plus deals. U.S. Treasuries were weaker and equities ended up.
The two-year muni-UST ratio Friday was at 68%, the five-year at 65%, the 10-year at 69% and the 30-year at 90%, according to Municipal Market Data's 3 p.m. EDT read. ICE Data Services had the two-year at 68%, the five-year at 66%, the 10-year at 70% and the 30-year at 89% at a 4 p.m. read.
Macro market conditions "support a continuation, and possibly an acceleration of the muni bond market rally," said BofA strategists, who, along with Barclays strategists, encouraged investors to add to their muni portfolios.
Issuance is at $29.07 billion month-to-date, according to LSEG, and the Bond Buyer 30-day visible supply sits at $20.6 billion, as of Thursday.
"The market appeared to have no problem absorbing the large calendar and managed to outperform Treasuries and corporates lately," BofA strategists said.
Despite the heavy supply, the market "feels good," supported by lower rates and robust inflows, Barclays strategists led by Mikhail Foux said.
"Long duration and lower coupon bonds continue to drive performance," they said.
BofA's analysts suggested investors "accumulate bonds more proactively while muni yields are still at reasonable levels." Foux and other Barclays strategists had a similar take.
"Begrudgingly, we are getting more inclined to start adding again," they wrote, "as the long-awaited pullback might not actually materialize."
BofA's strategists, like many in the market, expect the Federal Reserve to cut rates again at its October meeting.
Based on recent comments from Fed Chair Jerome Powell, BofA predicts the Fed will end qualitative tightening in December and start buying $15 billion of Treasury bonds per month in March. The latter would be the first time the Fed started buying treasuries since September 2019.
"If the historical pattern repeats, we should expect a strong market rally from here into March 2026, and then a stabilization for some months thereafter," BofA's strategists wrote, although they noted the market is experiencing downward pressure from labor market deterioration and the federal shutdown, and volatility from U.S.-China trade tensions.
New-issue calendar
The new-issue calendar is at $15.637 billion, with $13.676 negotiated deals on tap and $1.961 billion of competitive ones.
CPS Energy leads the negotiated calendar with $2.237 billion coming to market across three deals, followed by the Texas Transportation Commission with $1.772 billion of general obligation mobility fund refunding bonds.
The competitive calendar is led by the Triborough Bridge and Tunnel Authority with $230 million of second subordinate revenue bond anticipation notes.
AAA scales
MMD's scale was bumped up to three basis points: 2.45% (unch) in 2026 and 2.35% (unch) in 2027. The five-year was 2.33% (-1), the 10-year was 2.76% (-2) and the 30-year was 4.13% (unch) at 3 p.m.
The ICE AAA yield curve was bumped up to two basis points: 2.42% (-2) in 2026 and 2.33% (unch) in 2027. The five-year was at 2.34% (unch), the 10-year was at 2.78% (-1) and the 30-year was at 4.09% (-1) at 4 p.m.
The S&P Global Market Intelligence municipal curve was bumped out long: The one-year was at 2.44% (unch) in 2025 and 2.36% (unch) in 2026. The five-year was at 2.33% (unch), the 10-year was at 2.77% (-2) and the 30-year yield was at 4.11% (-1) at 3 p.m.
Bloomberg BVAL was bumped up to a basis point: 2.39% (unch) in 2025 and 2.35% (unch) in 2026. The five-year at 2.24% (-1), the 10-year at 2.76% (-1) and the 30-year at 4.08% (-1) at 4 p.m.
Treasuries were weaker.
The two-year UST was yielding 3.463% (+4), the three-year was at 3.468% (+4), the five-year at 3.589% (+4), the 10-year at 4.006% (+3), the 20-year at 4.573% (+2) and the 30-year at 4.601% (+2) near the close.
Primary to come
The Texas Transportation Commission (Aaa//AAA/) is set to price Tuesday $1.772 billion of general obligation mobility fund refunding bonds. Loop Capital Markets.
CPS Energy (Aa2/AA-/AA-/) is set to price Tuesday $1.398 billion of taxable revenue refunding bonds, New Series 2025A. BofA Securities.
CPS Energy (Aa3/A+/AA-/) is also set to price Wednesday $514.83 million of variable rate junior lien revenue and refunding bonds, Series 2025A. Truist.
Additionally, CPS Energy (Aa2/AA-/AA-/) is set to price Tuesday $324.13 million of revenue refunding bonds, New Series 2025B. BofA Securities.
The New Jersey Transportation Trust Fund Authority (A1/A/A/A/) is set to price Wednesday $1.5 billion of transportation program bonds, Series 2025 AA. J.P. Morgan.
The New York City Transitional Finance Authority (Aa1/AAA/AAA/) is set to price Wednesday $1.5 billion of future tax secured tax-exempt subordinate bonds, Fiscal 2026 Series B. Siebert Williams Shank.
The Kentucky State Property and Buildings Commission (Aa3//AA-/) is set to price Wednesday $940.27 million of Project No. 133 revenue bonds, consisting of $775 million of Series A bonds and $165.27 million of Series B refunding bonds. BofA Securities.
The California State Public Works Board (Aa3/A+/AA-/) is set to price Tuesday a $642.505 million deal, consisting of $621.195 million of Series 2025C and $21.31 million of Series 2025D. J.P. Morgan.
The Wayne County Airport Authority (A1/A+//AA/) is set to price Tuesday $465.58 million of Detroit Metropolitan Wayne County Airport revenue refunding bonds, consisting of $28.965 million of Series D, $194.405 million of Series E, $7.125 million of Series F, $189.91 million of Series G and $45.175 million of Series H. Siebert Williams Shank.
The Sacramento City Unified School District, California, (/AA//) is set to price Thursday $451.88 million of GO bonds, consisting of $262.5 million of GO 2020 Election (Measure H) bonds, Series C; $143 million of GO 2024 Election (Measure D) bonds, Series A; $9.855 million of 2025 GO refunding bonds, Series A; and $36.525 million of 2025 GO refunding bonds, Series B. Loop Capital Markets.
The Williamsburg Economic Development Authority, Virginia, (/A+//) is set to price Tuesday $330 million of taxable The Colonial Williamsburg Foundation Project revenue bonds. Wells Fargo.
The Cumberland County Industrial Facilities and Pollution Control Financing Authority (Aa1///) is set to price Tuesday $250 million of Project Aero solid waste disposal revenue bonds. Oppenheimer.
The Frisco Independent School District, Texas, (Aaa/AAA//) is set to price Tuesday $214.4 million of PSF-insured unlimited tax refunding bonds, Series 2025B. Piper Sandler.
North Slope Borough, Alaska, (/AA//AA+/) is set to price Wednesday $186.75 million of GOs. Jefferies.
The Oklahoma City Water Utilities Trust (Aaa/AAA//) is set to price Thursday $185.91 million of utility system revenue refunding and improvement bonds. Morgan Stanley.
The Conroe Independent School District, Texas, (Aaa/AAA//) is set to price Wednesday $185.14 million of PSF-insured unlimited tax refunding bonds. RBC Capital Markets.
The Comal Independent School District, Texas, (Aaa///) is set to price Tuesday $184.21 million of PSF-insured unlimited tax refunding bonds. Frost Bank.
The Missouri Joint Municipal Electric Utility Commission (A3//A/) is set to price Tuesday $151.37 million of Marshall Energy Center Project power project revenue. Wells Fargo.
The Glendale Industrial Development Authority, Arizona, (/AA-/AA/) is set to price Thursday $150 million of Midwestern University revenue. Raymond James.
Metrocare Services (Aa3///) is set to price Wednesday $142.49 million of revenue bonds. Raymond James.
The Maryland Health and Higher Educational Facilities Authority (A1/AA//) is set to price Wednesday $135.565 million of TidalHealth issue revenue bonds, Series 2025C. KeyBanc.
The Village Community Development District No. 16, Florida, is set to price Thursday $127 million of nonrated special assessment revenue bonds. Jefferies.
The Colorado Health Facilities Authority (/A-//) is set to price Thursday $125 million of Craig Hospital Project hospital revenue bonds, consisting of $105 million of Series A and $20 million of Series B. RBC Capital Markets.
The South Carolina Student Loan Corp. (/AA//) is set to price Thursday $112.1 million of taxable senior student loan revenue bonds, Series 2025A. RBC Capital Markets.
Oregon (Aa1/AA+/AA+/) is set to price Thursday $109.44 million of GOs, Series 2025K. Morgan Stanley.
The IPS Multi-School Building Corp., Indiana, (/AA+//) is set to price Wednesday $107.75 million of social ad valorem property tax first mortgage bonds. Stifel.
Pensacola, Florida, (/A+/A+/A+/) is set to price Tuesday $104.625 million of AMT airport revenue bonds. BofA Securities.
The Mission Economic Development Corp. (A1///) is set to price Wednesday $100 million of Vinton Steel LLC Project solid waste disposal revenue bonds. Jefferies.
Competitive
The Triborough Bridge and Tunnel Authority, New York, is set to sell $230 million of second subordinate revenue bond anticipation notes, Series 2025A, at 10:45 a.m. Tuesday.
Suffolk County, New York, (/AA-/AA-/) is set to sell $188.735 million of public improvement serial bonds, Series 2025A, at 11 a.m. Thursday.
Fayetteville, North Carolina, (Aa2/AA/AA/) is set to sell $156.135 million of public works commission revenue bonds, at 11 a.m. Tuesday.
Henrico County, Virginia, (///AAA/) is set to sell $125 million of water and sewer system revenue bonds, Series 2025D, at 10:30 a.m. Thursday.
Lawrence, Kansas, is set to sell $121.57 million of water and sewage system improvement and refunding revenue bonds at noon Thursday.
The Parkway C-2 School District, Missouri, is set to sell $100 million of GOs at 11:30 a.m. Monday.
