Primary bond market

Municipals followed U.S. Treasuries firmer after markets reacted to the Moody's downgrade of several mid-sized U.S. banks. New issues saw good demand and repriced to lower yields as a result.

While triple-As were little changed the past two sessions, some damage was done last week, leaving market participants generally less optimistic for the final weeks of August.

Late summer is "rarely a good time for our asset class," Barclays strategists said, noting the municipal investment grade index lost money in August three years in a row, and 2023 seems to follow this trend.

Though the city has vast financial strengths, it is struggling with the costs of housing migrants and declining commercial property values.

Municipal bond mutual fund saw outflows return with Refinitiv Lipper reporting investors pulling $989.852 billion from funds for the week ending Wednesday, led by ETFs and long-end funds.

Proceeds, along with additional monies, will be used to fund the cost of the Royal Caribbean Cruises Ltd. (RCG) campus project as well as a debt service reserve fund.

However another town is still struggling with issues that further threaten its already-strained viability while 14 local governments were designated as distressed under the viable utility reserve legislation.

J.P. Morgan held a one-day retail order for $1.65 billion of revenue bonds from the Dormitory Authority of the State of New York, while Minnesota sold $1.02 billion of GOs in the competitive market in five deals.

This week kicks off a flip of calendar to the final month of the summer reinvestment season and one of the larger new-issue calendars of the year.

For the coming week, investors will be greeted with a larger new-issue calendar led by large New York and Texas ISD issuers, along with gilt-edged Minnesota selling competitively.