Municipal Summary
Municipals are finishing the week steady - content to stand still with Treasuries and digest today’s nonfarm print and any de-escalation in the middle east. Volumes were better, selling pressure was contained, fund and ETF flows have remained positive and deals have been distributed well to retail and institutional accounts. But current high-grade prices are still teetering along their moving averages, and more dollars have moved into tax-exempt money market funds in recent sessions which has pulled SIFMA lower by ~70 bps. So there is still caution underlying the market despite strong seasonal expectations - which is reasonable given the ambiguity of fundamentals (i.e., Iran/oil/jobs) and neutrality of some key technicals (i.e., namely momentum, but others too - discussed more on Monday).
Secondary Breaks
Below is a review of secondary break activity for deals sold between 4/24/26 and 5/7/26. Secondary breaks are captured from the trading tape each session, and measure the average difference between a deals original issue yield and its first secondary traded yield. Each trade is adjusted for any AAA movement between sale and trade data. For more detail on methodology and for a longer history, see our Analytics Dashboard HERE
General: Over the last 10 sessions, secondary breaks have averaged -0.5 bps through originals across 418 trades, with 57% breaking to lower yields. Some of the largest breaks to higher yields were on high-grade borrowers selling competitively, and some of the largest breaks to lower yields were on lower rated revenue and local GO names - typical behavior among ratings, sectors and offering types.
www.munistreetresearch.com
Offering type: Negotiated deals broke approximately -3 bps through originals across 229 trades (all sectors trading to lower yields), while competitive sales averaged +2 bps across 189 trades. The ~5 bps total difference is consistent with longer term averages between negotiated and primary sales.
www.munistreetresearch.com
Maturity: Similar to last week, short-end maturities (2028–2029) broke to higher yields, the belly was more mixed and the long-end generally broke firmer - likely a result of more dynamic curve movement between maturities in recent weeks. But it is also consistent with limited institutional presence in the primary market for long duration, which can leave more room for bonds to trade firmer in the secondary.
www.munistreetresearch.com
Sector: Over the period reviewed, Healthcare, Transportation, and Higher Education had the widest break disparities, breaking 3–4 bps through originals, while Utilities and K-12 Education held closest to originals at roughly -1 bp.
www.munistreetresearch.com
Coupon: Breaks by coupon were fairly consistent across structures.
www.munistreetresearch.com
Rating: Breaks by rating were a bit more mixed this week, but still reflected the tendency for lower-rated deals to break by larger disparities when becoming free to trade.
www.munistreetresearch.com
Deal Table
Macro/Rate Summary
NY Fed Survey of Consumer Expectations: 1-year inflation expectations jumped, longer-run unchanged after rounding; expectations for higher unemployment ticked up; perceived likelihood of missing minimum debt payment eased.
Initial jobless claims rose to 200K but historically subdued; 4-week moving average fell; continuing claims fell more than expected.
Announced job cuts rose in April but year-to-date layoffs are 50% lower than same period last year.
Nonfarm payrolls rose 115,000 last month after an even bigger surge in March, marking the strongest two-month increase since 2024, according to Bureau of Labor Statistics data out Friday. The unemployment rate was unchanged at 4.3%.
Q1 nonfarm productivity slowed; unit labor costs decelerated below expectations on sharp moderation in compensation; Goldman wage tracker eased.
Total construction spending rebounded on private residential strength; data center construction widening lead over general office.
Consumer credit posted largest increase since late 2022 — both revolving and non-revolving surged amid cost-of-living pressures.
Federal trade court struck down Trump's 10% global tariffs (ruled Section 122 didn't authorize them); tariffs likely to remain in place pending appeals.
Treasury total return index peaked mid-2020; will hit 70 months in drawdown by end of this month.
Market-based inflation expectations eased across the curve.
US high-yield spreads now tighter than pre-Iran-conflict levels; European HY also tighter.
US refined oil stocks falling at fastest rate on record for time of year as refiners can't meet export demand.
Global food prices climbed to highest level in more than three years; American Farm Bureau Federation survey found ~70% of producers unable to afford all needed fertilizer.
US struck Iranian military targets after Tehran attacked US warships in Strait of Hormuz — regional escalation.
2026 EPS forecasts continue to be raised; forward EPS growth accelerating; US equities at 46% premium to rest of world.
Riskiest stocks hit all-time highs vs S&P 500 while safest stocks hit all-time lows; AAII bull-bear spread turned net bullish; active manager US equity exposure back at high end of range.
Anthropic's pre-IPO valuation surged to $1.2 trillion.
Tripp Kaiser is the founder of munistreet, is the executive director of the center on municipal capital markets and is a professor of practice at the LBJ School of Public Affairs at the University of Texas at Austin.