Secondary bond market

There will be more queasiness ahead of any calm in municipals as adjustments to the coronavirus-induced climate continue to test the market’s resolve.

Forced selling continues and credit spreads are widening as much as 200 basis points in spots making for a large bid-ask disconnect in the market.

Coronavirus-led fears are leading investors, particularly retail, to cash once again amid uncertainty surrounding how much and what maturities of municipal bonds the Fed will purchase once its program begins.

The primary market remained mostly on the sidelines with issuers slow to jump back into coronavirus-driven volatility while also awaiting Fed engagement.

The CARES Act gives the Federal Reserve and Treasury up to 10 days to begin purchasing municipal securities in the secondary market.

A more measured tone settled in on Monday as new deals begin to price in a coronavirus-weary marketplace. Municipal credit is beginning to come into focus.

The municipal bond market is poised to begin digesting larger primary issuance in the coming week after a massive rally in recent days.

Speaker Nancy Pelosi, D-Calif., said the next package will make up for shortcomings that haven’t been addressed such as the insufficient aid to state and local governments.

Demonstrating compliance with pricing and supervision rules has been challenging in the COVID-19-influenced market.

Speaker Nancy Pelosi, D-Calif., pledged Thursday the massive spending bill would pass on a voice vote even though some objections were expected during a Friday morning vote.