Munis rallied Wednesday morning, seeing gains for the first time in nearly two weeks and with potentially the largest bumps since April 2025.
Refinitiv MMD's scale was bumped five to 15 basis points at its 12:30 p.m. read, with the 10-year at 4.10%-4.12% and the 30-year at 5.13%-5.15%.
The ICE AAA yield curve was bumped 12 to 17 basis points at 12:30 p.m., while Bloomberg BVAL saw yields fall four to 10 basis points.
The rally in the muni market comes from some early-morning stability in the Treasury market — with UST yields flat on the short end but moving higher out long — and the better-than-expected inflation print, which has reduced the odds of the Federal Reserve hiking rates at its October meeting, said Lyle Fitterer, co-lead of the municipal sector and senior portfolio manager at Baird Funds.
The muni market will also receive $28 billion of principal and interest set to be paid to investors Thursday, according to CreditSights.
"The message has been going out that if you look at municipals on a yield basis, and especially on a tax-adjusted basis, they look extremely attractive and probably the most attractive we've seen since pre-Great Financial Crisis," Fitterer said.
In secondary trading, Wisconsin 5s of 2027 were at 3.33% versus 3.36%-3.29% Monday. California 5s of 2028 at 3.59%-3.54%. Virginia State Public School Authority 5s of 2028 at 3.77% versus 3.78% Tuesday.
New York City 5s of 2035 at 4.15%-4.14% versus 3.88% Sept. 11. California State University 5s of 2036 at 4.04%. Michigan State Truck Line 5s of 2036 at 4.10%-4.08% versus 4.18% Sept. 24.
New York City Transitional Finance Authority 5s of 2051 at 5.30% versus 5.19% Friday and 5.08% Sept. 23. DASNY 5s of 2053 at 5.35% versus 5.35%-5.33% Tuesday and 5.24% Friday. Dallas ISD 5s of 2056 at 5.21%-5.25% versus 5.09%-5.00% on Sept. 22 and 5.03%-5.01% on Sept. 17.
