Municipals were steady Friday ahead of a smaller, but still sizable, new-issue calendar. U.S. Treasury yields rose and equities ended up.
The two-year muni-UST ratio Thursday was at 60%, the five-year at 63%, the 10-year at 75% and the 30-year at 94%, according to Municipal Market Data's 3 p.m. ET read. ICE Data Services had the two-year at 60%, the five-year at 64%, the 10-year at 74% and the 30-year at 95% at a 4 p.m. read.
Following the
Tax-exempts have performed in line with USTs, and muni ratios are largely moving sideways, they said.
This performance has been a "rather remarkable achievement" during one of the heaviest weeks of supply in a broadly robust year, Barclays strategists said.
There are signs, though, that investors are running low on capital amid the record supply, with bids-wanted activity up 22% in the week of Aug. 4 from the five-week average, said J.P. Morgan strategists, led by Peter DeGroot.
"As such, while [the Aug. 11] week's tax-exempt new issue calendar is a more manageable $10 billion, we see heightened potential for rate volatility," they said. "If rates comply, however, the market should be supported by continued inflows, compelling absolute yields, and attractive long-end valuations versus taxable fixed income."
Treasuries, meanwhile, railed and steepened in the aftermath of payroll numbers, Barclays strategists said. As a result, "total returns for the investment-grade index have finally moved into positive territory for the first time since April."
"To us, the IG market has finally started to show its underlying strength," they said. "Heavy August redemptions have definitely played a role in helping to absorb supply, but heavy fund inflows also benefited the market."
That fate of the high-yield market will depend on the upcoming Brightline deal, Barclays strategists said. If the outstanding bond is rolled," it could spark a relief rally and high yields could recoup some recent losses.
"All in all, we remain relatively optimistic for the next several weeks, although the market might actually perform better in Q425, as it typically does," they said.
J.P. Morgan strategists said they are favoring the longer part of the curve in the final quarter of the year, "given cheap valuations, an expected deceleration in new issue volume in 4Q25, and our revised call for an earlier resumption in the Fed easing cycle, which could put downward pressure on our supply forecast and be supportive of municipal fund inflows."
New-issue calendar
Issuance for the week of Aug. 11 remains elevated at an estimated at $10.713 billion, with $8.857 billion of negotiated deals and $1.857 billion of competitive deals on tap, according to LSEG.
The Port Authority of New York and New Jersey leads the negotiated calendar with $1.137 billion of consolidated bonds.
The competitive calendar is led by the Miami-Dade County School District, Florida, with $450 million of tax anticipation notes, followed by DeKalb County, Georgia, (Aa3//AA-/) with $435.22 million of water and sewerage revenue bonds.
AAA scales
MMD's scale was unchanged: The one-year was at 2.25% and 2.27% in two years. The five-year was at 2.41%, the 10-year at 3.21% and the 30-year at 4.58% at 3 p.m.
The ICE AAA yield curve was cut up to two basis points: 2.26% (unch) in 2026 and 2.23% (+1) in 2027. The five-year was at 2.42% (+1), the 10-year was at 3.16% (+1) and the 30-year was at 4.56% (unch) at 4 p.m.
The S&P Global Market Intelligence municipal curve was unchanged: The one-year was at 2.26% in 2025 and 2.28% in 2026. The five-year was at 2.41%, the 10-year was at 3.21% and the 30-year yield was at 4.58% at 4 p.m.
Bloomberg BVAL was unchanged: 2.24% in 2025 and 2.26% in 2026. The five-year at 2.40%, the 10-year at 3.15% and the 30-year at 4.54% at 4 p.m.
Treasuries were weaker.
The two-year UST was yielding 3.76% (+3), the three-year was at 3.729% (+4), the five-year at 3.832% (+4), the 10-year at 4.286% (+4), the 20-year at 4.833% (+3) and the 30-year at 4.855% (+3) near the close.
Primary to come
The Port Authority of New York and New Jersey (Aa3/AA-/AA-/) is set to price Wednesday $1.137 billion of consolidated bonds, consisting of $173.88 million of Series 249 and $963.53 million of Series 250. Ramirez.
The Long Island Power Authority (A2/A/A+/) is set to price Tuesday $750 million of electric system general revenue bonds, consisting of $500 million of Series 2025A and $250 million of Series 2025B. J.P. Morgan.
The New Hope Cultural Education Facilities Finance Corp. (Aa3/AA/AA-/) is set to price Wednesday $600 million of hospital revenue bonds (Children's Health System of Texas), consisting of $500 million of Series 2025A and $100 million of Series 2025B. Goldman Sachs.
The National Finance Authority is set to price Tuesday $466.271 million of municipal certificates, consisting of $407.404 million of Series 2025-A-1 bonds (/AA-//), $52.455 million of Series 2025A-2 bonds (/BBB//) and $6.412 million of unrated subordinate Series 2025-B bonds. Jefferies.
The South Dakota Health and Educational Facilities Authority (/A+/AA-/) is set to price Wednesday $454.145 million of Sanford revenue bonds, consisting of $279.1 million of Series 2025B fixed rate bonds, $75 million of Series 2025C-1 tender bonds, $75 million of 2025C-2 tender bonds and $25 million of Series 2025E forward-delivery bonds. J.P. Morgan.
Philadelphia (A1//A+/) is set to price Thursday $369.02 million of airport revenue and refunding bonds, consisting of $107.845 million of non-AMT/governmental airport revenue bonds, Series 2025A, and $261.175 million of AMT/private activity airport revenue and refunding bonds, Series 2025B. Wells Fargo.
The Florida Local Government Finance Commission is set to price $333.455 million of non-rated senior living revenue bonds (Fleet Landing at Nocatee Project), consisting of $173.515 of Series 2025A, $16 million of Series 2025B1, $22.25 million of Series 2025B2, $115 million of Series 2025B3 and $6.69 million of Series 2025C. Ziegler.
Fort Bend County, Texas, (Aa1//AAA/) is set to price Thursday a $270.46 million deal, consisting of $100.99 million of Series 2025A, $45.565 million of Series 2025B, $28.665 million of Series 2025C and $95.24 million of Series 2025D. J.P. Morgan.
The Maryland Stadium Authority (/AA/AA/) is set to price Tuesday $261.78 million of taxable revenue bonds (Baseball Stadium Issue), consisting of $251.385 million of Series 2025B and $10.395 million of Series 2025C. Raymond James.
The Virginia Port Authority (A1/A//) is set to price Monday $251.775 million of non-AMT port facilities revenue bonds. BofA Securities.
The Texas Department of Housing and Community Affairs (Aa1/AA+//) is set to price Wednesday $250 million of non-AMT residential mortgage revenue and refunding bonds, Series 2025D. Jefferies.
The New York City Health and Hospitals Corp (Aa3/A+/AA-/) is set to price Wednesday $247.015 million of health systems bonds, Series 2025A. BofA Securities.
The Delaware River Port Authority (A1/AA-//) is set to price Wednesday $227.055 million of revenue refunding bonds. Raymond James.
The New Jersey Housing and Mortgage Finance Agency (/AA-//) is set to price Tuesday $200 million of non-AMT social multi-family revenue bonds, consisting of $96.695 of Series 2024D-1 and $103.305 of Series 2024D-2. Barclays.
The Arlington Higher Education Finance Corp. (Ba2///) is set to price Wednesday $175.96 million of education revenue and refunding bonds (Basis Texas Charter Schools, Inc.). Morgan Stanley.
The Iowa Student Loan Liquidity Corp. (/AA//) is set to price Thursday $160.95 million of senior student loan revenue bonds, consisting of $100 million of taxable Series 2025A bonds and $60.95 million of AMT Series 2025B bonds. RBC Capital Markets.
Riverside, California, (Aa3/AA-//) is set to price Tuesday $140.635 million of refunding sewer revenue bonds, Series 2025A. BofA Securities.
The Regents of the University of Idaho (/AA//) are set to price Thursday $137.78 million of general revenue bonds, Series 2025A. Wells Fargo.
The Mt. Hood Community College District, Oregon, (Aa2///) is set to price Wednesday $136.445 million of Oregon School Bond Guaranty Act-insured GOs. Piper Sandler.
The Alaska Railroad Corp. (/BBB-//) is set to price Thursday $124.22 million of AMT cruise port revenue bonds. BofA Securities.
The Grace Christian School National Finance Authority (/BBB-//) is set to price Wednesday $118.72 million of education revenue bonds (GRACE Christian School Project). Stifel Nicolaus.
The Board of Trustees of the Metropolitan State University of Denver (Aa2/AA//) is set to price Tuesday $110.785 million of Colorado State Intercept Program-insured institutional enterprise revenue bonds (Student Housing and Event Center Project), consisting of $101.16 million of Series 2025A bonds and $9.625 million of taxable Series 2025B bonds. BofA Securities.
Competitive
The Miami-Dade County School District, Florida, is set to sell $450 million of tax anticipation notes at 11 a.m. Eastern Wednesday.
DeKalb County, Georgia, (Aa3//AA-/) is set to sell $435.22 million of water and sewerage revenue bonds (Second Resolution), Series 2025A, at 10 a.m. Tuesday.
Wisconsin (Aa1/AA+//) is set to sell $267.08 million of GOs, Series 2025B, at 10:45 a.m. Tuesday.
Oyster Bay, New York, is set to sell $242.445 million of bond anticipation notes at 11 a.m. on Tuesday.
The Anderson School District No. 4, South Carolina, (Aa1/AA//) is set to sell $115 million of GOs (South Carolina School District Enhancement Program) at 11 a.m. Wednesday.
Frank Gargano contributed to this report.
