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5th October 2026

Municipal market update

Municipals outperformed Treasuries last week as ETF and crossover buying in the latter half of the week offset early outflows and bid wanted.

On the week, MMD yields fell 8 basis points in both 2 and 10 years and rose 2 basis points in 30 years.

The AAA MMD scale was cut by as much as 15 basis points on Monday, before rallying in each of the final three sessions. Treasuries remained under pressure from elevated oil prices and the conflict with Iran, with the 30-year yield reaching 5.62% on Tuesday, its highest level since 2002, before a weak September jobs report (+29,000 vs. +90,000 expected) provided some relief. On the week, MMD yields fell 8 basis points in both 2 and 10 years and rose 2 basis points in 30 years. Conversely, Treasury yields rose 2 to 14 basis points, leaving the 2-year and 10-year municipal-to-Treasury ratios near 70% and 75%, respectively.

This week, primary-market supply is expected to increase to approximately $16 billion, well above the year-to-date weekly average of $11.0 billion. Cabrera will serve as Co-Manager on the State of California’s $1.745 billion, City of New York’s $1.5 billion, State of Connecticut’s $1.042 billion, CPS Energy’s $493 million, and Illinois Housing Development Authority’s $200 million issues. The three largest transactions on this week’s calendar include:

• $1.745 billion State of California Various Purpose General Obligation & Refunding Bonds

• $1.500 billion City of New York General Obligation Bonds

• $1.490 billion California Community Choice Financing Authority Clean Energy Project Revenue Bonds (Green Bonds)

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