UMB Market Update
Municipal Market Data (MMD) yields decreased 25 to 43 basis points across the curve during the week of April 6, extending a rally that started the prior week. Attractive muni/treasury ratios and three weeks of light primary market supply helped to attract a broad range of buyers. In total, $4.98 billion of transactions were priced during the week, $1.9 billion more that the prior week total. While some transactions listed in day-to-day status priced, more than $8.1 billion remained on the calendar. The Federal Reserve unleased another round of emergency measures, including a $500 MMD AAA Curve Lookback Municipal Liquidity Facility to assist states and large local governments with tax shortfalls. According to Census data, 10 cities and 16 counties are large enough to participate.
Questions remain as to how the Federal Reserve might support smaller municipalities. Throughout the week, treasuries remained well-supported by Federal Reserve purchases. The S&P 500 was up 12.10 percent from its close the previous week as the increase in Coronavirus cases seemed to slow and news surfaced of an agreement to support oil prices. Eyes are now on the corporate earnings season as we move into the week of April 13.