Munis were cheaper in spots on Wednesday, outperforming U.S. Treasuries. Equities ended down.
Bond markets started the day weaker, but spiking oil prices, a result of the U.S. Treasury
Muni yields were cut up to three basis points, depending on the scale, while UST yields rose six to eight basis points.
Even before the oil news, muni and UST yields were cheaper. Cooper Howard, director of fixed income research and strategy for Charles Schwab, said the Treasury market was anticipating the Wednesday release of the minutes from last month's Federal Open Market Committee meeting.
Higher UST yields are a "major factor" pressuring muni yields, according to Howard. But the muni market is still strong, he said.
"We're continuing to see elevated amount of issuance, and, despite that, munis are actually performing very well," Howard said. "The downside of it is that it's pulled muni-to-Treasury ratios much lower, especially at the short end of the curve. So that could potentially be a headwind moving forward, but I think the seasonal factors will outweigh that."
New-issue market
In the primary market Tuesday, Jefferies priced for the
Jefferies priced for Michigan State Building Authority (Aa2/AA-/AA/) $358.11 million of facilities program 2026 revenue and revenue refunding bonds, Series I, with 5s of 10/2026 at 2.38%, 5s of 10/2031 at 2.75%, 5s of 4/2036 at 3.13%, 5s of 10/2036 at 3.18%, 5s of 10/2041 at 3.58%, 5s of 10/2046 at 3.90%, 5s of 10/2051 at 4.26%, 5s of 10/2056 at 4.43% and 5s of 4/2061 at 4.52%, callable 10/2036.
