Secondary bond market

Negotiated deals were repriced to lower yields while competitive deals saw levels coming in through triple-A benchmarks. High-grade benchmarks were little changed.

Municipal triple-A benchmarks were pushed to lower yields by one to three basis points across the curve, with the bigger moves out long, but still vastly underperformed the 10-plus basis point moves in UST.

Supply, however, is still less than the massive amounts of cash on hand. Bond Buyer data shows 30-day visible supply at $12.53 billion.

U.S. Treasuries have been volatile the past five sessions, with municipals largely ignoring the ride. Participants mostly have accepted current rates and ratios as large amounts of cash slosh around a market with strong technicals.

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A key demand component in the market again flexed its muscles with ICI reporting another round of $2 billion-plus fund inflows.

Municipals outperformed U.S. Treasuries for a third sessions moving the 10-year municipal to UST ratio below 60%.

Most participants expect better performance for munis in the near-term. Longer-term, a lot depends on rates, COVID and other outside factors, such as infrastructure.

While municipals hit the pause button Friday, the movement in yields in the first week of July marked the largest one-week decline in 2021.

Fund inflows are a demand component unlikely to slow during the heavy reinvestment season, keeping the yield environment squarely in issuers' favor.

More of the same from the FOMC did little to move UST or munis. ICI reported the 17th consecutive week of inflows at $1.98 billion. July is looking good for municipal issuers.

U.S. Treasury 10- and 30-year yields hit February lows. Large blocks of high-grades in secondary trading led triple-A benchmarks to lower yields by two to four basis points across the curve.

With better-than-expected payrolls, economists still caution full recovery is a ways away. Muni participants are closely following how the Fed's action — or inaction — will affect the municipal market going forward.

The broader market awaits Friday’s nonfarm payrolls report, but Thursday brought some helpful labor news — unemployment claims dropped to the lowest since before the pandemic-caused economic shutdowns and layoffs plunged in June.

Gilt-edged munis fell as much as two basis points Wednesday as the month ended and the first half stats were put into the record books.

A majority of the week's largest new issues priced at yields mostly at or around benchmarks as secondary trading did little to move scales. In economic data released Tuesday, the June consumer confidence index climbed, suggesting spending will rebound.

With various Federal Reserve officials airing their views since the Federal Open Market Committee’s latest meeting, it may take a while for members to reach agreement on tapering, a boon for municipals.

Making it a summer Friday, munis were quiet. Participants contemplate why the market underperformed taxables to the degree they did when fundamentals are objectively strong and little has changed since before the FOMC.

The final new issues of the week close with some bumps in repricings while the secondary was quiet.

Triple-A benchmark yields moved higher by as much as five basis points while ICI reported another $1.8 billion of inflows and ETFs increase their share by $841 million.