FMNY - Municipal Issuance Eclipsed Expectations
2024-04-08 16:08:00 ET
Summary
- Municipals posted marginally negative performance and lagged Treasuries in March.
- The transition back to net positive supply acted as a considerable drag throughout the month.
- Continued seasonal headwinds warrant patience and caution in April.
Market overview
Municipal bonds posted marginally negative performance in March amid heightened macro uncertainty. Interest rates were volatile but ended slightly firmer as stronger-than-expected economic data was counterbalanced by dovish guidance from the Federal Reserve. Municipals underperformed comparable Treasuries across the curve, bogged down by rich valuations and weakening supply-and-demand dynamics. The S&P Municipal Bond Index returned -0.02%, bringing the year-to-date total return to -0.09%. Lower-rated credits and the 15-year part of the yield curve performed best....
Municipal Issuance Eclipsed Expectations