September 28, 2018

As expected, the FOMC increased its target rate by 25 basis points last week continuing its tightening cycle. Equity markets took a breath after a two week rally digesting the higher short‐term rates. The DJIA closed at 26,458, down 285 points. One‐month LIBOR continued to tick up ahead of last week’s FOMC meeting where the 25-basis point rate increase was widely expected. The SIFMA Index was up 8 basis points last week resetting at 1.56% which is 69% of one‐month LIBOR. Treasury yields rose leading up to the Fed meeting but rallied after as expectations for future rate increases did not change. The 10-year Treasury closed at 3.062%, relatively unchanged from last week’s close. The 30-year treasury finished the week at 3.206%, up 6 basis points from the previous Friday’s close. The 10-year MMD was down 1 basis point, while 30-year MMD was down 4 basis points, closing last week at 2.58% and 3.19%, respectively. As of Friday, the percent of municipals to treasuries was 84.26% for the 10-year maturity and 99.50% for the 30-year maturity.

The two issuers in the single-family markets last week were Oklahoma Housing Finance Agency and the State of California with it’s competitive sale issue of Veteran GO Bonds. Issuers in the multifamily space for the last week were District of Columbia Housing Finance Agency, Columbia Housing & Redevelopment Corporation (TN) , Fridley Housing & Redevelopment Authority (MN), and the City of Minnetonka (MN).

Economic news through Friday includes Markit US Manufacturing PMI, ISM Manufacturing, ISM Employment, MBA Mortgage Applications, Initial Jobless Claims, Continuing Claims, Bloomberg Consumer Comfort, Factory Orders, Durable Goods Orders, Trade Balance, Change in Nonfarm Payrolls, Unemployment Rate, Labor Force Participation Rate, and Consumer Credit.

Please also note that Bond Markets are closed on Monday, October 8th. Stock markets will remain open.

There are several deals on the calendar for this week:

$225,000,000 Tennessee Housing Development Agency
$105,000,000 Federal Home Loan Mortgage Corp: FHLMC
$100,000,000 New York City Housing Development Corp
$90,000,000 New York City Housing Development Corp
$84,765,000 New York City Housing Development Corp
$42,795,000 New York City Housing Development Corp
$32,000,000 Utah Housing Corporation
$26,000,000 Idaho Housing & Finance Authority