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19th October 2026

Municipal market update

Treasuries rallied across the curve last week despite a hotter-than-expected September CPI print of 3.7% year-over-year; Thursday’s surging PPI and Retail Sales data briefly paused the rally, while Fed speakers including Williams and Daly signaled further hikes are likely but not urgent.

On the week, MMD yields fell 8bps in 2-years and 3bps in 5-years, but rose 1 and 5bps in 10 and 30 years, respectively.

A late-Friday surge in oil, with Brent reaching $110 per barrel, cheapened the long end into the close. Municipals outperformed, with the AAA MMD scale richening through the week and Thursday’s session delivering the largest one-day decline in muni yields in 18 months. Municipal funds reported roughly $1.6 billion of inflows as the market absorbed roughly $8.7 billion of holiday-shortened supply. Secondary trading was mixed, with heavy bid-wanted lists competing for capital as the market adjusted to rate volatility. On the week, MMD yields fell 17-23 basis points, with the 2-, 5- and 10-year each down 23 basis points and the 30-year down 17 basis points. Treasury yields also declined, with the 2-year down 8 basis points, the 5-year down 15, the 10-year down 16 and the 30-year down 17. This left municipal-to-Treasury ratios near 65% on the 2-year, 67% on the 5-year, 73% on the 10-year and 91% on the 30-year.

This week, primary-market supply is expected to rise to approximately $13.4 billion, with $8.5 billion negotiated and $4.8 billion competitive. Cabrera will serve as Co-Manager on the Los Angeles Unified School District’s $1.4 billion issue. Economic data this week includes Housing Starts and Pending Home Sales on Tuesday, Weekly Jobless Claims and Leading Indicators on Thursday, and the flash PMIs and final University of Michigan consumer survey on Friday. The three largest transactions on this week’s calendar include:

• $1.4 billion Los Angeles Unified School District General Obligation Bonds, Series QRRUS (2026) (Dedicated Unlimited Ad Valorem Property Tax Bonds)

• $741.5 million Metropolitan Transportation Authority Transportation Revenue Refunding Green Bonds, Series 2026A (Climate Bond Certified)

• $583.9 million Commonwealth of Massachusetts Dedicated Transportation Revenue Bonds, 2026 Series

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13th October 2026

Municipal market update

Municipals saw a volatile week, as yields weakened through midweek amid geopolitical headlines and a heavy new-issue calendar before a Friday rally saw the AAA MMD scale to improve by 12bps across the curve.

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