Municipal Yields Stabilization
Municipal yields are expected to stabilize, according to Matt Fabian, president of Municipal. The yields remain attractive for pure income buyers, and constructive fund inflows are sufficient to support rising issuance.
"In theory at least, municipal yields should be able to stabilize here; levels remain attractive for pure income buyers while more sustainable constructive fund inflows are just enough to speak for rising issuance in the absence of meaningful reinvestment,"
On Wednesday, munis were steady to firmer, with U.S. Treasuries showing little change and equities ending up. The muni-UST ratios were as follows:
- Two-year: 66% (Municipal Market Data) and 67% (ICE Data Services)
- Five-year: 64% (Municipal Market Data) and 65% (ICE Data Services)
- 10-year: 70% (both sources)
- 30-year: 90% (Municipal Market Data) and 89% (ICE Data Services)
Author's summary: Municipal yields expected to stabilize.