Munis steady ahead of House vote on shutdown
5 min read
Municipals were little changed Wednesday as U.S. Treasury yields fell and equities ended mixed as an end to the government shutdown is in sight.
The two-year muni-UST ratio Wednesday was at 69%, the five-year at 66%, the 10-year at 68% and the 30-year at 89%, according to Municipal Market Data’s 3 p.m. EDT read. ICE Data Services had the two-year at 69%, the five-year at 66%, the 10-year at 67% and the 30-year at 88% at a 4 p.m. read.
The Investment Company Institute Wednesday reported inflows of $650 million for the week ending Nov. 5, following $3.634 billion of outflows the previous week.
Exchange-traded funds saw inflows of $984 million after $5.531 billion of inflows the week prior, per ICI data.
Since the start of the last quarter of 2025, front-end munis have cheapened with the two- and five-year MMD-UST ratios cheapening by three to four percentage points, while the 10- and 30-year ratios outperforming USTs by up to two percentage points, said Jason Wong, vice president of municipals at AmeriVet Securities.
Despite this mismatch in performance, munis are still seeing gains for the quarter of approximately 1.8% and 4% year-to-date, he said.
This 4% return is due to the Federal Reserve’s monetary policy easing, as munis were in the red before September’s rate cut, Wong said.
Munis still lag other fixed-income performance, as UST and corporate returns are at 6% and 7.12%, respectively, he said.
“This is due to the heavy issuance at the start of the year as well as the speculation of the potential elimination of tax-exemption of munis being included in the One Big Beautiful Bill that was passed earlier this year,” he said.
“Continuing yield stability — despite the UST and news swings, heavy volume … and MMA valuation metrics signaling downside risk to prices at spots 10 years and longer — suggest a comfortable market that, even with the shutdown apparently close to ending, may resist/lag potential price/yield changes in taxables,” said Matt Fabian, president of Municipal Market Analytics.
These could include a reversal of recent flight-to-safety flows into USTs, especially if “investors assume more risk of accelerating UST supply, inflation, and (crucially) tariff rejection by SCOTUS,” he said.
“Not to mention how the release of currently unpaid salaries to furloughed or fired/now-rehired federal workers will boost near-term growth and employment data; potential health insurance losses (on ACA subsidy removals) present the opposite pressure,” Fabian said.
However, it seems unlikely that this will reprice municipal lender demand, as muni mutual fund and exchange-traded fund inflows remain mostly positive and separately managed account interest continues, despite an ETF-related increase in average trade size last week, he said.
Additionally, an “unseasonal near-term bump” in reinvestment — which may be due to issuers refunding near-term maturities to improve resilience and cash flow — is likely to help buying, Fabian said.
In the primary market Wednesday, BofA Securities priced for the Omaha Public Power District, Nevada, (Aa2/AA//) $409.385 million of electric system revenue bonds. The first tranche, $310.025 million of Series B, saw 5s of 2/2029 at 2.57%, 5s of 2030 at 2.53%, 5s of 2035 at 2.78%, 5s of 2040 at 3.41%, 5s of 2045 at 3.95%, 5s of 2055 at 4.24% and 5s of 2055 at 4.33%, callable 8/1/2035.
The second tranche, $99.36 million of Series C, saw 5s of 2/2027 at 2.59%, 5s of 2030 at 2.53%, 5s of 2035 at 2.78% and 5s of 2039 at 3.33%, callable 8/1/2035.
Jefferies priced for the National Finance Authority $359.841 million of municipal certificates. The first tranche, $307.215 million of Series 2025-3, Class A-1, saw 4.794s of 2/2041 at 4.50%.
The second tranche, $45.43 million of Series 2025-3, Class A-2, saw 4.794s of 2/2041 at 4.875%.
The third tranche, $7.196 million of Series 2025-3, Class B, saw 4.794s of 2/2041 at 8.00%.
J.P. Morgan priced for the Franklin County, Ohio, (Aa2//AA/) $233.815 million of hospital refunding and improvement revenue bonds (Nationwide Children’s Hospital), Series 2025A, with 5s of 11/2026 at 2.74%, 5s of 2030 at 2.75%, 5s of 2035 at 3.06%, 5s of 2036 at 3.16% and 5.25s of 2055 at 4.51%, callable 11/1/2035.
J.P. Morgan priced for Joliet, Illinois, (/AA//) $110.91 million of waterworks and sewerage senior lien revenue bonds, with 5s of 1/2034 at 2.95%, 5s of 2035 at 3.05%, 5s of 2040 at 3.73%, 5s of 2045 at 4.34% and 5.25s of 2050 at 4.51%, callable 1/1/2035.
In the competitive market, Dallas (/AA-/AA/) sold $232.6 million of GOs to Jefferies, with 5s of 2/2027 at 2.60%, 5s of 2030 at 2.55%, 5s of 2035 at 2.88%, 5s of 2040 at 3.53% and 4.125s of 2045 at 4.35%, callable 2/15/2035.
AAA scales
MMD’s scale was unchanged: 2.54% in 2026 and 2.46% in 2027. The five-year was 2.41%, the 10-year was 2.75% and the 30-year was 4.14% at 3 p.m.
The ICE AAA yield curve was cut up to a basis point: 2.55% (unch) in 2026 and 2.46% (unch) in 2027. The five-year was at 2.41% (unch), the 10-year was at 2.75% (+1) and the 30-year was at 4.10% (+1) at 4 p.m.
The S&P Global Market Intelligence municipal curve was little changed: The one-year was at 2.54% (unch) in 2025 and 2.45% (+1) in 2026. The five-year was at 2.40% (unch), the 10-year was at 2.75% (unch) and the 30-year yield was at 4.12% (unch) at 3 p.m.
Bloomberg BVAL was bumped one basis point: 2.52% (-1) in 2025 and 2.47% (-1) in 2026. The five-year at 2.37% (-1), the 10-year at 2.71% (-1) and the 30-year at 4.04% (-1) at 4 p.m.
Treasuries were firmer.
The two-year UST was yielding 3.567% (-3), the three-year was at 3.562% (-3), the five-year at 3.669% (-5), the 10-year at 4.07% (-5), the 20-year at 4.638% (-5) and the 30-year at 4.666% (-4) near the close.
Primary to come
Chicago (/A+/A+/A+/) is set to price Thursday for
Miami-Dade County, Florida, (Aa3/AA/AA-/AA/) is set to price Thursday $975.915 million of water and sewer system revenue bonds, consisting of $570.55 million of Series A bonds and $405.365 million of Series B refunding bonds. Wells Fargo.
The Los Angeles Municipal Improvement Corp. (/A+/AA//) is set to price Thursday for the Los Angeles Convention Center $967.705 million of lease revenue bonds, consisting of $850.9 million of tax-exempt Series 2025-A and $116.805 million of taxable Series 2025-B bonds. Morgan Stanley.
The University of Delaware is set to price Thursday $310.375 million of tax-exempt bonds, Series 2025A. Barclays.
The Central Florida Expressway Authority (Aa3/AA-//) is set to price Thursday $277.21 million of senior lien revenue bonds, Series 2025A. BofA Securities.
The Monroe County Industrial Development Corp. (Aa3/AA-//) is set to price Thursday $223.215 million of revenue bonds (University of Rochester Project), consisting of $122.445 million of non-AMT Series 2025A bonds and $100.77 million of taxable Series 2025B bonds. BofA Securities.
The Santa Monica-Malibu Unified School District, California, (Aa1/AA+//) is set to price Thursday $130 million of GOs, consisting of $127.675 million of tax-exempts and $2.325 million of taxables. Baird.
Competitive
The Virginia Housing Development Authority (Aa1/AA+//) is set to sell $102.78 million of non-AMT rental housing bonds, 2025 Series F, 11 a.m. Eastern Thursday.
