Munis firmer out long, see monthly and yearly gains

Municipal Bond Market Trends

Munis showed firmer results in the long term, with notable monthly and yearly gains.

According to Birch Creek strategists, the technical picture is expected to improve in November and December, suggesting that "the wider new issue concessions brought about via the heavy new issue calendar will likely be rewarded."

The wider new issue concessions brought about via the heavy new issue calendar will likely be rewarded.

On Tuesday, munis were firmer out long, while USTs richened 10 years and in, and equities ended mixed. The muni-UST ratios were:

as per Municipal Market Data's 3 p.m. data.

ICE Data Services reported similar ratios at 4 p.m.:

Jason Wong, vice president of municipals at AmeriVet Securities, noted that the front end saw 2026-2029 maturities experience a two to five basis point cut, while the rest of the curve saw yields bumped one to five basis points.

Birch Creek strategists observed that munis continued their underperformance last week for the second consecutive week, led by front-end weakness.

Author's summary: Munis show promise with expected technical improvements.

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