Muni yields bumped, caps off strong week

Munis richened further on Friday, capping off a week of gains. U.S. Treasuries were little changed and equities were higher.

Muni yields were bumped three to six basis points, depending on the scale, pushing the 10-year muni yield below 3.00%. Friday's market movements were bigger than Thursday's, when media outlets reported that the ceasefire between the U.S. and Iran could be extended for 60 days, pending approval from President Donald Trump. Trump was set to make a "final determination" on the deal Friday, but it's unclear if anything had been agreed upon by 4 p.m.

Tom Kozlik, head of municipal strategy at Hilltop Securities, said strong institutional demand and fund flows throughout the year have allowed the muni market to remain relatively stable, even during this month's "modestly challenging" market.

However, Kozlik said, it's difficult to know whether the market's hot streak will last into next week.

"We've got some short-term optimism but pressures that could potentially be with us for not just weeks, but months," Kozlik said. That includes the conflict in the Middle East, and "how hard it's going to be, not only for parties to come to some kind of agreement, but ? to put the genie back in the bottle and go back to where we were in January and February."

New-issue market
Issuance rises to an estimated $12.157 billion the week of June 1, with $9.501 billion of negotiated deals on tap and $2.656 billion of competitives, according to LSEG.

The Regents of the University of California leads the negotiated calendar with $1.14 billion of general revenue bonds.

The competitive calendar is led by Maryland with $800 million of general obligation state and local facilities loan bonds in three series.