Munis were steady to slightly firmer in spots Friday, while short-term U.S. Treasuries saw small gains and equities ended mixed.
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With the Federal Reserve meeting next week, there should be “relatively manageable” tax-exempt supply, which should ease the pressure on bids wanteds, which were up 42% this week compared to the five-week average, said J.P. Morgan strategists led by Peter DeGroot.
“Elevated August supply will be priced to clear the market, despite solid reinvestment capital, as heavy dealer balances remain from this week,” they said.
Moreover, J.P. Morgan strategists expect “the direction and magnitude of UST rate change will play an even more pivotal role in municipal market liquidity, given the recent deceleration in fund flow momentum.”
Primary to come
Issuance is an estimated $7.558 billion for the week of July 27, with $6.709 billion of negotiated deals on tap and $849.4 million of competitives, according to LSEG.
The Colorado Health Facilities Authority leads the negotiated calendar with $1.029 billion of hospital revenue bonds (AdventHealth Obligated Group), followed by the Long Island Power Authority with $946.12 million electric system general revenue bonds.
The competitive calendar is led by Fort Lauderdale, Florida, with $313.635 million of stormwater utility system special assessment revenue bonds.