Primary municipal bond market volume is expected to inch up to $7.3 billion, as analysts expect the muni market to stay on a path of suppressed supply and deep demand.

Ipreo estimates volume will crawl up to $7.32 billion, from the revised total of $7.02 billion sold in the past week, according to updated figures from Thomson Reuters. The calendar for the week ahead is composed of $4.77 billion of negotiated deals and $2.55 billion of competitive sales.

“It’s been relatively quiet, with steady and strong demand and limited issuance, market participants have just been plugging away and I expect that theme to continue,” said Dawn Mangerson, managing director and senior portfolio manager at McDonnell Investment Management. “There has been so much demand; having a deal get bumped 10 basis points seem to be common right now, whereas before it used to just be a few BPs – making it difficult for the dealers to price these transactions.”

Jim Grabovac, senior portfolio manager at McDonnell said a lot of people are searching for yield, impacting how deals are being structured, as there is strong performance for lower coupon structures.

“With how much political uncertainty there is out there and what seems like a new story out each day, it is remarkable how little volatility there has been in the equity and fixed income markets,” Grabovac said. “That partly contributes to the outperformance of lower coupon structures. With how much demand there is for municipals, the participants aren’t allowing the market to fluctuate that much being moving back down.”

The agenda shows 19 scheduled sales $100 million or larger, with eight on the competitive side and two issuers who are bringing roughly $2.51 billion between them.

JPMorgan is slated to price the Cleveland Clinic Health System’s $1 billion of obligated group State of Ohio hospital refunding revenue bonds on Tuesday after a one-day retail order period. It is anticipated that the deal will feature $840 million of tax-exempts and $160 million of taxables. The deal is rated Aa2 by Moody’s Investors Service and AA by S&P Global Ratings. S&P raised the system’s rating to AA from AA-minus recently, as a result of expansion plans the system has in its U.S. and international operations

The New York City Transitional Finance Authority is scheduled to competitively sell $1.35 billion of Fiscal 2018 Series A future tax secured tax-exempt and taxable subordinate bonds on Tuesday. The separate bond sales consist of: $180.915 million of Subseries A-1 tax-exempts; $407.205 million of Subseries A-2 tax-exempts; $411.88 million of Subseries A-3 tax-exempts; $124.055 million of Subseries A-4 taxables; and $225.945 million of Subseries A-5 taxables. The TFA also intends to reoffer about $162 million of Fiscal 2018 Series 1 fixed-rate tax-exempts via competitive bid to convert existing floating-rate bonds into fixed-rates.

Goldman Sachs is expected to price Miami-Dade County, Fla.’s $647.785 million of aviation revenue and revenue refunding bonds on Thursday after a one-day retail order period. The transaction will feature both alternative-minimum tax bonds and taxable bonds and is rated A by S&P and Fitch Ratings and AA-minus by Kroll Bond Rating Agency.

Morgan Stanley is scheduled to price Philadelphia’s $278.235 million of gas works revenue bonds, 15th series for 1198 General Ordinance on Tuesday. The deal is rated A3 by Moody’s, A by S&P and BB-plus by Fitch.

Secondary market
Top shelf municipal bonds finished weaker on Friday after the release of a stronger-than-expected jobs report for July.

The yield on the 10-year benchmark muni general obligation rose one basis point to 1.93% from 1.92% on Thursday while the 30-year GO yield increased one basis point to 2.72% from 2.71%, according to the final read of Municipal Market Data's triple-A scale.

Non-farm payrolls rose 209,000 last month while June's data was revised higher to show a 231,000 gain, originally reported as a rise of 222,000. Economists polled by IFR Markets had predicted payrolls would increase 175,000 in July. The unemployment rate fell to 4.4% last month from 4.3% in June, correctly forecast by economists surveyed by IFR Markets.

Treasuries turned weaker on the news. The yield on the two-year Treasury rose to 1.35% from 1.34% on Thursday, the 10-year Treasury yield gained to 2.26% from 2.23% and the yield on the 30-year Treasury bond increased to 2.84% from 2.81%.

The 10-year muni to Treasury ratio was calculated at 85.1% on Friday, compared with 86.1% on Thursday, while the 30-year muni to Treasury ratio stood at 95.6% versus 96.5%, according to MMD.

Week's actively traded issues
Some of the most actively traded bonds by type in the week ended Aug. 4 were from Massachusetts, California and Illinois issuers, according to Markit.

In the GO bond sector, the Massachusetts 2s of 2018 were traded 49 times. In the revenue bond sector, the Bay Area Toll Authority of Calif.. 3.25s of 2036 were traded 104 times. And in the taxable bond sector, the Illinois 5.1s of 2033 were traded 24 times.

Week's actively quoted issues
Illinois and Virginia names were among the most actively quoted bonds in the week ended Aug. 4, according to Markit.

On the bid side, the Illinois taxable 5.1s of 2033 were quoted by 47 unique dealers. On the ask side, the Virginia College Building Authority revenue 3s of 2035 were quoted by 380 unique dealers. And among two-sided quotes, the Illinois taxable 5.1s of 2033 were quoted by 25 unique dealers.

Lipper: Muni bond funds see inflows
Investors in municipal bond funds again saw investors put cash into the funds in the latest week, according to Lipper data.

The weekly reporters saw $143.847 million of inflows in the week of Aug. 2, after inflows of $322.992 million in the previous week.

The four-week moving average turned positive at $148.209 million, after being in the red at $2.329 million in the previous week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.

Long-term muni bond funds had inflows of $118.150 million in the latest week after inflows of $229.732 million in the previous week. Intermediate-term funds had inflows of $19.414 million after inflows of $70.336 million in the prior week.

National funds had inflows of $203.351 million after inflows of $431.650 million in the previous week. High-yield muni funds reported inflows of $73.549 million in the latest reporting week, after inflows of $188.672 million the previous week.

Exchange traded funds saw inflows of $54.212 million, after inflows of $123.905 million in the previous week.

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