MuniStreet: Monday June 8, 2026

Municipal 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 | Macro/Rate Summary

Friday's nonfarm print was the week's defining event, even amid a plethora of fundamentals elsewhere. The NFP release, alongside geopolitical headlines that pushed oil higher, cheapened credit markets broadly: IG and HY corporates, emerging markets, MBS, CMBS, leveraged loans and Treasuries all suffered losses last week. Municipals, impressively, not only outperformed all of the latter — but IG and HY munis were also two of the only "credit markets" tracked by MuniStreet to produce positive returns MTD.

So there has been a great deal of resilience across the tax-exempt space, led by: 1) demand from mutual funds and ETFs, which have not only avoided outflows but have taken inflows of ~$3B MTD into long and high-yield strategies; 2) limited forced selling pressure as a result of those inflows; 3) strong interest and reinvestment demand from retail and SMAs for income at taxable-equivalent yields >5.0%; 4) large money-market allocations being drawn down to afford some of those purchases; and 5) healthy credit profiles for IG borrowers with strong market access for HY borrowers.

The dealer/underwriter community has also done a good job distributing a record-sized calendar while managing inventory risk — deals have been well bid and subscribed for, balances per Fed data remain manageable, and secondary trade breaks have widened but not to magnitudes suggestive of concessionary or defensive pricing/positioning.

So the municipal market, despite higher rate volatility and fundamental uncertainties, is still functioning with enough order to price and distribute a large calendar while preserving near-term (MTD) and longer-term (YTD) total returns.

Municipals outperformed a ~9bp rise in the 10yr Treasury last week, with benchmarks improving 3–8bps across the curve.

The compression in ratios to −2.3 to −2.7 standard deviations “rich”, combined with $15-$20B in weekly issuance and a forward calendar running well above the last 3yr average, argues for a bit more discipline on further duration extension.

2s/10s and 2s/30s spreads tightened modestly, continuing a flattening trend that has persisted over the last 1–2 months.

Net customer buying was positive all week, with Wednesday's ~$485K average trade size running ~60% above the YTD average of ~$310K — the strongest single-session trade size in months — and Thursday continuing above average at ~$401K; the latter reflecting strong institutional engagement amid fund inflows and reinvestment demand.

Price deviations — measuring the speed and magnitude of investment-grade index price adjustment — continued to drift higher, closing the week at +0.72%. Still, investment-grade valuations remain in a neutral range (i.e., not overbought or oversold).

2026's daily price movement has held at ~68% of sessions unchanged — above the 60% long-term average — with the distribution continuing to show an unusually low count of moderate-negative sessions (2 YTD vs. a historical average of ~17/year).

Municipal yield volatility held near its recent elevated range as the rolling 20-day window continues to include the adverse mid-May sessions. The measure is expected to decline as those readings roll off, assuming stability/strength holds through the upcoming seasonally supportive summer months.

Lipper reported +$1.4B in total flows for the June 3 week — with Long (+$1.3B) and HY (+$426M) leading — marking the 6th consecutive positive week. Meanwhile, tax-exempt money market fund AUM declined by ~$2B as “cash” has been used to pursue higher yields and longer duration. SIFMA reset higher to 2.14% from 1.57% as a result. Lastly, municipal ETFs have gained $9B since May and nearly $25B YTD.

Bids-wanted volume has continued to hold steady and at reasonable levels, assisted by the absence of fund outflows and related needs for secondary liquidity, and also strong institutional demand for primary market supply.

All three momentum signals — short, intermediate, and long — remain positive for a second consecutive week, having recovered from uniformly negative in May. Sustained positive momentum entering the June reinvestment window supports continued offensive positioning; although the current positive trend has been in place for 9 days now, which is near the longer-term average length of a positive trend.

The June through August period is among the strongest of the calendar year, assisted by greater reinvestment demand, moderating supply and lower price volatility.

$19.3B priced last week — well above the YTD weekly average of ~$10.9B — bringing YTD issuance to a record ~$257.4B. Forward visible supply this morning is ~$17.0B, above last year's comparable (~$14.4B) and well above the last 3yr average of ~$11.1B. Recall, heavier supply can weigh on participant sentiment, but it has not historically correlated closely with price losses.

Expected 30-day reinvestment climbed to ~$47.6B this morning — near 2025 ($47.4B) but above 2024 ($38B) and 2023 ($37B) totals at this point in the year.

Credit spreads widened modestly last week; Baa-AAA closed at ~96bps (+1bp WoW) and HY-AAA at ~175bps (+2bps WoW) — but overall a minor adjustment and not suggestive of a developing credit narrative.

Tripp Kaiser, CFA, is the founder of MUNISTREET, Executive Director of the Center on Municipal Capital Markets, and a professor of practice at the LBJ School of Public Affairs at the University of Texas at Austin.