Primary bond market

In the summer, the market will largely move "sideways" and underperform late in the third quarter to early in the fourth quarter, "while possibly recouping most of its losses late in the year depending on the outcome of November elections," said Barclays strategists.

"Bond yields are plunging [Thursday] as rate cut expectations soar following this morning's consumer price index release, which depicted the first month of deflation since July 2022," noted José Torres, senior economist at Interactive Brokers.

Large-scale issuers, including state-level transportation authorities, counties and sales tax entities, have "planned volume to coincide with implied demand," said Kim Olsan, senior vice president of municipal bond trading at FHN Financial.

A revenue bond issue for Galveston Wharves will price Tuesday after Hurricane Beryl interrupted port operations earlier this week.

Overall, demand is "high," an ongoing tailwind for munis, along with solid fundamentals, Nuveen strategists said.

S&P Global Ratings revised the outlook on the city's AA rating to negative from stable, citing increased debt and costs from a settlement with firefighters.

Competitive deals are slated to total about $2.9 billion, near the highest for any week this year, said J.P. Morgan strategists.

In a year characterized by a rise in mega deals, the agency looks to address an advancing financial "cliff."

The new-issue calendar rises to $9.175 billion next week, with $6.089 billion of negotiated deals coming to market and $3.086 billion of competitive deals on tap.

The issuance is expected to generate strong interest in D.C., Virginia, and Maryland.