Primary bond market

The nation's second-largest county heads into the market next week with a GO refunding buoyed by an upgrade and an outlook boost.

Municipals were quiet on Monday following Friday's rally and ahead of the $9.6 billion estimated to be priced early in the week before the Veterans Day holiday close Thursday. Connecticut priced for retail.

Dallas Area Rapid Transit is enjoying a lift in tax revenues amid a drop in ridership during the pandemic.

The long end of the municipal curve rallied under a backdrop of stronger-than-expected October jobs data and upward revesions to the prior two months ahead of the arrival of $9.6 billion next week.

For 35 weeks in a row, investors have put cash into municipal bond funds as Refinitiv Lipper reported $603 million of inflows while high-yield funds eked out a gain of slightly more than $1 million.

After the FOMC made taper official, high-grade benchmark yields ended the day one to three basis points better while USTs ended the day higher after an up-and-down trading session that moved the 30-year back above 2%.

The FOMC will likely take the opportunity to profess its reliance on data to decide liftoff and reiterate the threshold for a rate hike remains higher than for taper.

The Illinois State Toll Highway Authority plans $600 million of borrowing next month and $500 million next year as its 15-year-old capital program remains in full speed ahead mode.

Though monetary policy has been in the forefront, at mid-month the tone changed with global inflation outlooks and federal infrastructure and social package in flux.

A lighter, $5 billion calendar, heavy on healthcare, kicks off November. Most participants agree volatility in U.S. Treasuries will be a leading factor for municipal market performance. Uncertainty in Washington also isn't helping the asset class.

Key institutional players like banks and insurance companies may have less incentive to buy tax-exempt munis if the provision becomes law.

Amid a flattening municipal yield curve and inversion of the Treasury market, new issues fared better than the secondary on Thursday as participants prepared for month end.

The lack of inclusion of the muni market's priorities in the reconciliation framework sends a strong signal they're unlikely to be included in the final legislation.

ICI reported the lowest inflows since outflows in March, while exchanged-traded funds saw an uptick.

As of now, returns for the month will very likely end in the red. The Bloomberg U.S. Municipal Index is at -0.40% for the month and +0.39% for the year.

S&P lifted its outlook to stable on Minneapolis' AAA rating and Fitch went positive on its AA-plus rating.

The $162 million tax-exempt new money deal is bolstered by two ratings upgrades and analysts say it will generate a lot of investor interest on Wednesday.

Despite a short-end U.S. Treasury rally, municipals face pressure on the one- and two-year as participants look to month-end positioning.

The fast pace of the Democratic negotiations may act in muni market's favor.

Volume falls slightly in the week of October 25 with total potential volume estimated at $7.408 billion: $6.036 billion of negotiated deals and $1.372 billion in the competitive market.