Munis were firmer on Friday after a two-day selloff. U.S. Treasuries continued to cheapen 10 years and in and equities ended higher.
Muni yields richened by up to five basis points, depending on the scale. Short-term and intermediate UST yields cheapened by three to four basis points at a 3:30 p.m. reading. .
Rates got "a little bit oversold" on Thursday in all markets, including munis, said Chris Brigati of SWBC. Friday's Consumer Price Index data indicated that inflation will continue, but it had little impact on muni yields, because that assumption was already priced in. Oil prices have also pulled back since Thursday, he said.
Brigati expects a more stable market next week, because supply is projected to fall below average and because of the Federal Open Market Committee meeting.
"The [Federal Reserve] will and should raise rates at the FOMC meeting," Brigati said. I'm thinking that might give the market a little bit of breathing room to say that the Fed has finally made the tough decision, is doing what they need to do and what they said they will do to fight inflation."
Primary to come
Issuance is an estimated $10.3 billion for the week of June 8, with $8.71 billion of negotiated deals on tap and $1.59 billion of competitives, according to LSEG.
The New Jersey Transportation Trust Fund Authority leads the negotiated calendar with $1.67 billion of transportation program bonds.
The competitive calendar is led by New York State with $317.53 million of GO bonds to be sold across two series.
