Munis were a touch firmer on the front end of the curve, as short-term U.S. Treasuries saw small gains and equities ended higher.
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Muni yields fell up to two basis points, with the largest bumps on the front end. UST yields fell up to three basis points on the front end but were flat out long.
The muni market may have a bit of a “hangover” after the three-and-a-half-day weekend, said Chris Brigati, managing director and CIO at SWBC. The buyside is “still trying to put some cash to work” after July 1 redemptions, but the sellside hasn’t given it many opportunities to do so yet.
“The inflationary impact of oil prices, which were keeping the long end of the Treasury market a little higher, started to abate [over the past week], and therefore Treasury yields started to come down a little bit. But they kind of stalled out, because the concern is still out there that inflation exists,” Brigati said. “There’s no defined relief, so to speak, for the Treasury market to really move toward lower levels, so it’s just hanging out in kind of a no man’s land.”