March 19, 2018

Municipal bonds were mostly unchanged on the last week, with a lean to being slightly better 15-years and longer. The lack of any movement is a compilation of a small new issue calendar, dealer desk apathy, and light secondary trading activity. All but Friday’s daily trading volume was several billion below the most recent 3-month average. Markets will continue to watch investor cash flows as we enter seasonal “tax time”, a period when investors may hold or extract cash from the market. U.S. Treasury rates decreased for the 10 year treasury closing Friday at 2.84%, down 5 bps week over week. The 30 year treasury finished the week at 3.07%, down 8 bps from the previous Friday’s close. The 10 and 30 year MMD indices closed last week at 2.50% and 3.03%, up 1 bp and down 4 bps on each scale respectively from the prior week. As of Friday, the percent of municipals to treasuries was 87.87% for the 10 year maturity and 98.44% for the 30 year maturity. 

Single family issuers in the market over the last few weeks included State of New York Mortgage Agency, Tennessee Housing Development Agency, Nebraska Investment Finance Authority, Utah Housing Corporation, and Michigan State Housing Development Authority. A good number of these issuers used a premium priced Non-AMT or AMT PAC as part of their issuance, to lower the overall cost of capital. Issuers in the multifamily space included Virginia Housing Development Authority, Houston Housing (TX), Colorado Housing Finance Authority, and Los Angeles Housing Authority (CA). Details for all of these transactions are included in this week’s Roundup.

Economic news this week includes MBA Mortgage Applications, Existing Home Sales, FOMC Rate Decision, Initial Jobless Claims, Continuing Claims , FHFA House Price Index, Bloomberg Economic Expectations, Markit US Manufacturing , Leading Index, Durable Goods Orders, New Home Sales, S&P CoreLogic CS, Conf. Board Consumer Confidence, and Conf. Board Expectations . This week the housing deals on the calendar include the following:

$ 28,450,000 Montana Board of Housing