In the latest installment of The Bond Buyers Muni Minute we examine how one of the weeks slowest years has been made even slower this year due to market volatility that has caused yields to by as much as 55 basis points since election day.
VOICE OVER: Municipal market participants should load up on turkey and stuffing on Thanksgiving, as there won’t be much to work with in the days leading up to the holiday. The week of Thanksgiving is historically a slow week in the market, but this year, market volatility will cause the week to be slower than normal. Top-shelf municipal bonds were pounded with post-presidential election jitters, and on November 14th, yields shot up 22 basis points in one trading session.
The complete opposite happened on June 24th when muni yields plummeted 19 basis points after Britain voted to exit the European Union. Market sources seem to think that once we get past turkey day and into the last month of the year, issuers will be hitting the market furiously to get the deals done before the Federal Open Market Committee meets to consider a rate hike in mid-December. Any such rate increase would be the first since December of 2015.
I’m Aaron Weitzman and this has been your Muni Minute.