Securitization

Spiking oil prices and incoming news from the Federal Reserve is pressuring UST yields, which are pressuring munis, according to Schwab's Cooper Howard.

The buy-side of the muni market is awaiting higher supply, SWBC's Chris Brigati said.

Deals that offer some value and spread opportunities will be well-received, while those that are less attractive or higher quality might face some challenges in certain parts of the curve, said Jeff Timlin, managing partner and head of municipal bond investing at Sage Advisory.

The muni market is poised for a strong week, Peter DeGroot wrote for J.P. Morgan, with a "manageable" new-issue calendar, near-record inflows year-to-date and July redemption money.

A number of factors are driving rate volatility, but the muni market is better positioned for a strong summer than it has been in a decade, according to Hennion & Walsh's James Pruskowski.

Strong offerings and the promise of July redemptions are helping munis weather a rough UST market, according to NewSquare Capital's Kim Olsan.

The U.S. and Iran have agreed to stop attacks in the Strait of Hormuz, Tim Iltz wrote for HJ Sims, but the tensions have taken a toll on oil prices.

The muni market is closing out the month of June with the curve "more or less static" to where it was at the end of May, Kim Olsan wrote for NewSquare Capital.

Thursday was quiet in the muni market as many deals — which did pretty well upon pricing or selling — came to market earlier in the week, said Ron Banaszek, co-head of public finance and lead underwriter at Blaylock Van.

Falling oil prices sparked a rally for Treasuries. Munis took some strength from USTs, according to Jeremy Holtz of Income Research + Management.

There wasn't any one factor driving the muni market's weaker performance, FHN's Ajay Thomas said. But investors had a lot of deals from which to choose.

SWBC's Chris Brigati said he expects munis to continue to outperform Treasuries, unless USTs aggressively sell off.

The market outlook is mixed, according to Barclays strategists.

The FOMC's hawkish tone hasn't cost munis yet, but the reaction from USTs may bring pressure, according to NewSquare Capital's Kim Olsan.

Favorable conditions for munis helped the asset class stay afloat, despite a hawkish FOMC.

Munis were little changed, but geopolitical and market conditions could bode well for the sector, MMA's Matt Fabian said.

Investors want to see what happens with the Fed and the Iran peace deal before they react, said Schwab's Cooper Howard.

Supply has been robust in June but issuance falls to an estimated $8.137 billion this week.

There has been some "capitulation" in munis lately. The asset class was outperforming USTs until very recently, said Chris Brigati, managing director and CIO at SWBC.

Many factors impact the performance of munis, and, this year, everything seems to be working for the positive.