Primary bond market

The Metropolitan Atlanta Rapid Transit Authority will issue $475 million in green sales tax revenue bonds for capital projects and refunding.

Muni yields were bumped one to eight basis points, depending on the scale, while UST yields fell three to 10 basis points, with the greatest gains out long.

Tax exemption concerns — though an elimination is unlikely — and the loss of federal stimulus will "most assuredly pull forward delayed issuance, with the first half of 2025 volume to exceed second half volume," said James Welch, a municipal portfolio manager at Principal Asset Management.

To close out the day, USTs remained mixed, with yields rising on the short end and falling out long, while munis were changed up to a basis point, depending on the curve.

January's municipal bond supply "will end up being heavier compared with the normally slow start of the year, but the pipeline should remain quite robust," Barclays said.

January's volume was $35.243 billion in 486 issues, up 10.8% from $31.817 billion in 554 issues in 2024, according to LSEG data.

The offering document for a White Lake Township bond sale sheds more light on the hack criminals used to intercept funds between the underwriter and borrower.

Investors added $741.7 million to municipal bond mutual funds in the week ending Wednesday, following $2.078 billion of inflows the prior week, according to LSEG Lipper data.

Even with the possibility of inflation and fiscal policy-induced headwinds, there is much to be optimistic about in the muni market, despite some possible near-term turbulence, said GW&K strategists.

The Fed meets this week, but the probability of another cut at Wednesday's meeting seems low amid elevated inflation and growth data, said Matt Fabian, a partner at Municipal Market Analytics.

The turnpike authority brings a $1.3 billion new and refunding bond deal to market this week after a toll hike sparked a spate of bills to rein in its powers.

The Local Government Commission needs to approve the proposed competitive sale.

Tech stocks suffered on "worries that Beijing is becoming increasingly competitive in the high-stakes artificial intelligence race," said José Torres, senior economist at Interactive Brokers.

Issuance for next week falls to an estimated $5.151 billion, with $3.959 billion of negotiated deals and $1.193 billion of competitive deals on tap.

Investors added $2.028 billion to municipal bond mutual funds in the week ending Wednesday, following $251.7 million of outflows the prior week, according to LSEG Lipper data.

Issuance was led by a $2 billion retail pricing from the University of California in the negotiated market and a $1.2 billion competitive deal from Washington.

Underperforming since the calendar turned, "munis have continued to cheapen over the past three weeks as Treasury returns are about flat for the year while munis are down 0.31%," said Jason Wong, vice president of municipals at AmeriVet Securities.

The Regents of the University of California leads the negotiated calendar with $2 billion of general revenue refunding bonds.

Munis "responded in part to a better UST session [Wednesday] but weren't in a position from a supply standpoint to attempt to match the 10-15 basis point rally in taxables," said Kim Olsan, a senior fixed income portfolio manager at NewSquare Capital.

It could be the year's largest unrated municipal bond deal.