Municipal Bonds Show Improvement
Munis were firmer out long, with a more favorable technical picture expected in November and December, according to Birch Creek strategists.
The two-year muni-UST ratio was at 67%, the five-year at 65%, the 10-year at 70% and the 30-year at 90%, as per Municipal Market Data's 3 p.m. data.
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 believe "the wider new issue concessions brought about via the heavy new issue calendar will likely be rewarded."
Munis continued their underperformance last week for the second consecutive week, led by front-end weakness.
Author's note: Munis show signs of improvement amidst expected favorable market conditions.