Munis were little changed on Thursday as two large mega deals priced to close out April. U.S. Treasuries richened and equities ended higher.
Muni yields were mostly unchanged, with the front of the curve increasing by up to two basis points. UST yields fell three to seven basis points, with the largest gains on the front end.
Conditions in the Middle East continue to drive market movements, said Ajay Thomas, head of public finance at FHN Financial, as oil prices fell roughly 3% on Thursday.
"Today's improvement in yields is related to investors digesting the commentary and actions of the [Federal Reserve] on Wednesday afternoon, the latest developments of the Middle East war with Iran and economic news that GDP growth in the United States came in at 2%, below the consensus view of 2.2%," Thomas said.
With "the Fed's announcement that interest rates would be at current levels for longer, the market has lost some predictability of where interest rates will go for the balance of 2026," he said. "When we started this year, interest rates were anticipated to be cut up to three times, then later twice, and now with the Fed's latest discussions, not at all."
New-issue market
In the primary market Thursday, Goldman Sachs priced for the Massachusetts Development Finance Agency (A2/A//) $1.396 billion of revenue bonds on behalf of Dana-Farber Cancer Institute. The first tranche, 1.304 billion of Series Q, saw 5s of 12/2036 at 3.57%, 5s of 2041 at 3.97%, 5s of 2046 at 4.42%, 5.5s of 2051 at 4.73%, and 5.5s of 2056 at 4.84%, callable 6/2036.
The second tranche, $91.98 million of Series R forward-delivery bonds, saw 5s of 12/2037 at 3.78%, 5s of 2041 at 4.11%, and 5s of 2046 at 4.60%, callable 6/2036.
J.P. Morgan priced $1.131 billion bonds for Energy Northwest (Aa2/AA-/AA/). The first tranche, $171.43 million of Project 1 electric revenue refunding bonds, Series 2026-A, saw 5s of 7/2031 at 2.82%, 5s of 2036 at 3.25% and 5s of 2040 at 3.59%, callable 7/2036.
The second tranche, $681.53 million of Columbia Generating Station electric revenue and refunding bonds, Series 2026-A, saw 5s of 7/2028 at 2.68%, 5s of 2031 at 2.82%, 5s of 2036 at 3.25%, 5s of 2041 at 3.66% and 5s of 2043 at 3.82%, callable 7/2036.
The third tranche, $278.49 million of Project 3 electric revenue refunding bonds, Series 2026-A, saw 5s of 7/2027 at 2.74%, 5s of 2034 at 3.08%, 5s of 2041 at 3.66% and 5s of 2042 at 3.73%, callable 7/2036.
BofA priced for the Burbank-Pasadena-Glendale Airport Authority, California, (A1/AA/A-/) $360.28 million of bonds. The first tranche, $21.89 million of Assured Guaranty-insured non-AMT Series 2026A bonds, saw 4.375s of 7/2056 at 4.59%, callable 7/2036.
The second tranche, $329.64 million of taxable Series 2026B with maturities past 2037 insured by Assured Guaranty, saw 5s of 7/2029 at 2.95%, 5s of 2031 at 3.14%, 5s of 2036 at 3.63%, 5.25s of 2041 at 3.90%, 5.25s of 2046 at 4.42%, 4.625s of 2051 4.81%, 5.5s of 2051 at 4.63% and 5.5s of 2055 at 4.68%, callable 7/2036.
The third tranche, $8.75 million of Assured Guaranty-insured taxable Series 2026C bonds, saw all bonds priced at par: 4.2s of 7/2028 and 4.28s of 2029, noncall.
Fund flows
Investors added $614.8 million into municipal bond mutual funds in the week ended Wednesday, following $1.019 billion of inflows the prior week, according to LSEG Lipper data.
High-yield funds saw inflows of $59.5 million compared to inflows of $110.7 million the previous week.
Tax-exempt municipal money market funds saw inflows of $2.007 billion for the week ending April 27, bringing total assets to $143.811 billion, according to the Money Fund Report, a weekly publication of EPFR.
The average seven-day simple yield for all tax-free and municipal money-market funds was 2.96%.
Taxable money-fund assets saw $647.4 million added, bringing the total to $7.476 trillion.
The average seven-day simple yield was 3.35%.
The SIFMA Swap Index was at 3.09% on Wednesday compared to the previous week's 3.65%.
