Munis and U.S. Treasuries were a bit firmer on Monday, suggesting investors are waiting for more details about the peace deal with Iran and Kevin Warsh's first meeting as Federal Reserve chair. Equities ended higher, with the Dow setting a record.
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Muni yields fell by up to two basis points outside. U.S. Treasury yields fell by up to three basis points, with the biggest gains in the three to seven-year range.
The president's announcement of a peace deal with Iran provoked little movement in the muni or UST market Monday. Schwab's Cooper Howard said investors want to see more evidence the deal is concrete before reacting. This week, he said, most of their attention will be on the Federal Reserve.
"It's going to be Warsh's first press conference," Howard said. "He's been very clear that he doesn't like [how much] the Fed communicates, so I would not be surprised if he lays the groundwork or even proposes potentially pulling back in terms of communications."
Christina Baker covers the Northeast for The Bond Buyer. Before that, she was an intern at The Bond Buyer via the Dow Jones News Fund. She's covered... Read full bio
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The front-end cheapening follows Wednesday's bear flattening of the UST curve in response to the Federal Reserve hiking rates and a median 2026 dot that implied another hike before yearend, said Kevin McGuigan, director at Municipal Market Analytics.
The guidance comes after Dave Sanchez, director of the Office of Municipal Securities, earlier this year signaled a focus by the SEC on whether MAs are fulfilling their duties to clients.
Housing officials in several cities are already laying the groundwork that will enable them to take advantage of the 21st Century Road to Housing Act passed by Congress earlier this year even though funding has not yet been appropriated.
