Monday: April 20, 2026

Municipal Summary | Macro/Rate Summary | Yields/Ratios/Term Spreads | Trading | Price Deviations | Price Distributions | Volatility | Fund & ETF Flows | Secondary Selling Pressure | Momentum | Seasonals | Supply | Deal Table | Reinvestment | Credit Spreads

Municipals had a strong week; benchmarks improved 2–6bps across a flatter curve (at least inside 10yrs) supported by strong price momentum, favorable fundamentals (i.e., via easing geopolitical tensions), positive ETF flows ($629M last week and near $15B YTD), and strong net customer buying. Indeed, institutions increased activity through the week’s rally (via larger trade sizes), which was accompanied by a continued SMA bid.

However, despite technical and fundamental support, conditions are still probably best argued as neutral, noting: 1) outflows from municipal mutual funds, now extending three consecutive weeks as per ICI (although inflows may now evolve from better MTD NAV performance), 2) volatile geopolitics headlines, and 3) a large trailing and forward supply calendar (i.e., with last week’s supply the highest of the year, and the 30-day forward figure still ~10% above the prior 3yr average).

Looking ahead, reinvestment totals of $21.7B are the highest of any comparable period in the last four years, contributing to May’s supportive seasonal expectations. Credit spreads also narrowed modestly on the week despite heavy supply and high fundamental anxiety - reflecting a strong/stable credit narrative.

Much does still depend on how geopolitics evolve, and if any related tailwinds are enough to prolong positive momentum. But uncertainty and headline volatility has created enough angst, at least for now, to argue against a strong rally into month-end.

Despite better yield movement and institutional demand activity, cross-market levels held mostly steady WoW. 5yr and 10yr ratios at 62% and 67%, respectively, are within their normal recent ranges; and while the 30yr has fallen a full 5 ratios MTD, long-end ratios’ standard deviations are not too rich. Curve slopes continued to consolidate, with the 2s/30s spread closing the week unchanged and near its last 3.5 month average. The 2s/10s spread flattened a touch during the week amid better SMA demand for intermediates; but the 2s/10s slope has still steepened +30 bps YTD, most of which occurred in the first two months of the year.

Customer buy/sell ratios ranged from 0.92 to 1.32x through the week, with Monday the only session of net customer selling. 5-day trades counts were also ~6% above the YTD average; so it was a week of generally decent trade volumes and strong customer interest. Customer-buy trades also averaged $386K mid-week compared to ~$230k average MTD; the latter reflecting: 1) fresh SMA capital allocations attracted by higher nominal yields, 2) early reinvestment positioning ahead of an expected surge in May call and maturity proceeds, and/or 3) fresh institutional capital chasing better total return (TRR) momentum. Still, overall, demand was better characterized as opportunistic for better income, rather than broad rate-market conviction pursuing strong TRR prospects.

Price deviations - a measure of the speed an magnitude of investment-grade index movement - continued to bounce off their late-March lows, but still closed the week within a normal range. Friday did contribute to the largest single-day jump in several weeks as yields rallied, but a +0.74% deviation value is still within neutral territory and not yet near a technically overbought condition. So, similar to last week, price movement has continued to normalize following a period of heightened daily price volatility.

2026’s daily movement continues to reflect a relatively normal distribution of price changes. Through 72 sessions, 66.7% have finished steady (i.e., or within ±0.15%), almost exactly at the long-run average of 65% over the last decade. Surprisingly though, not a single session YTD has fallen in the moderate-negative bucket (-0.25% to -0.15%) compared to a historical average of 17 days per full year - the latter apt to start occurring. However, positive-tail sessions are also running below average (8.3% vs. ~13%). The good news: large left-tail buckets are at or near historical averages, reducing at least some participant anxiety before seasonals turn more supportive.

Yield volatility fell last week as quieter sessions helped roll off more volatile early-April readings from the 20-day window. The 5yr closed at ~55bps annualized (down from ~66bps the week prior) and the 10yr at ~57bps annualized (down from ~71bps). To the extent price deviations and distributions continue to normalize (as per above), these rolling volatility measures will fall further. But until then, lingering vol does suggest: 1) a generally more concessionary tone in the primary market, 2) a slightly more defensive dealer, 3) bid-ask spreads more vulnerable to widening, and 4) investor sentiment being generally tentative despite better momentum and income opportunities.

Mutual fund flows have been trending negative for three consecutive weeks — -$218M (Mar 25), -$727M (Apr 1), and -$349M (Apr 8) — after a multi-month stretch of positive inflows that peaked at $3.0B in early February. Even money market fund AUM declined $4B WoW and dragged SIFMA nearly 200 bps higher. Earlier mutual fund NAV losses, high price and geopolitical volatility and an uncertain rate and economic policy context have all created enough ambivalence to generate pause among fund investors. Conversely, ETF flows have been solid and distributed broadly across short, intermediate, and long strategies. ETF inflows have also been positive nearly every week in 2026.

Bid-wanted volumes averaged ~$1.15B on a 20-day rolling basis through last week — above the $960-1,020M range seen in February and early March — with daily prints ranging from a peak of $1.46B on both April 8 and April 9 to a light $853M on Friday. But rather than real sell pressure, the latter better reflects: 1) cash-raising to pay taxes, 2) duration reduction amid geopolitical uncertainty, and 3) buy-side making room for a very heavy primary calendar. Fund outflows contributed, but the fact that volumes were absorbed without meaningful price disruption argues for more opportunistic selling and rebalancing than for forced liquidations.

All three momentum signals — short, intermediate, and long — are opening positive, having shifted from negative in mid-March. Positive trends supported performance last week, and should encourage more offensive positioning in the week ahead.

April’s seasonal track record is mixed — averaging a total return of just +0.12% since 2010, and was negative in 5 of the last 7 years. Three headwinds have defined the month: 1) lower reinvestment relative to surrounding months (especially in the 1H), 2) elevated supply, and 3) tax-related selling. But the MTD price return of 1.58% has already exceeded the month’s average and is contrary to seasonal expectations. Looking ahead, seasonals turn much more supportive in May, where returns have averaged +0.71% over the last decade. It has been the strongest month in Q2 and third strongest of the year.

YTD issuance reached $162B through April 17 — running 13% above the 2025 pace and 31% above 2024 at the same point in the calendar. Last week’s $17.84B of supply was the heaviest week of the current year, following $10.0B the prior week. Despite the heavy volume, geopolitical backdrop, and high trailing rate volatility, deals were generally well received. Looking ahead, forward visible supply has declined to ~$15.5B this morning — below 2025 (~$24.3B) and the recent historical average this time of year.

Expected 30-day reinvestment totals are ~$21.7B this morning — above the comparable levels for 2025 ($18.5B), 2024 ($16.3B), and 2023 ($15.3B) at the same point in the year. Mid-April represents a transitional point in the reinvestment calendar, where totals are expected to climb meaningfully over the next ~6–8 weeks. The latter has historically supported prices through the late spring and summer months.

Credit spreads held steady last week; Baa-AAA closed at 100bps and the HY-AAA spread at 182bps. So a week of improvement (despite geopolitical uncertainty) did little to adjust the current strong/stable credit context.

Tripp Kaiser is the founder of munistreet and is the executive director of the center on municipal capital markets and professor of practice at the LBJ School of Public Affairs as the University of Texas at Austin.