Weekly Muni Commentary
April 14th, 2025 | Q2
Daily Avg. Offering Line Items
Daily Avg. Notional Offered
CUSIPs Offered on TWD
Dealers Offering on TWD
Buy/Sell Ratio Trend
Bid Wanted Flow
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Happy Monday!
It was a painful week for the municipal market, which suffered losses and volatility not seen since the COVID era. Tariff policy announcements and an ensuing trade war have caused investors to flee US Treasuries and Municipals alike. Municipals suffered three back-to-back days of losses to start the week – rising over 80bp across the curve. Thursday’s sharp rally was short lived, with municipal yields rising again through Friday’s close. The drastic sell-off in muni’s was summarized by JP Morgan Strategists as “The result of forced selling given the confluence of this week's around 45bps jump in 10yr UST rates, record ETF outflows, elevated tax-exempt supply, lower reinvestment capital, legislative uncertainty, all against the backdrop of global policy and broader capital market disruption". The underperformance verses Treasuries leaves ratios ~80% through 10y and edging towards 100% in 30y.
ETF and Mutual Funds both reported historic outflows, which aligns with the speed and vastness of last week’s rout. Investors pulled $1.4B from muni ETF’s last week which was "the largest weekly outflow since the inception of municipal ETF reporting in 2006", according to Peter DeGroot of JP Morgan. Mutual Funds reported $3.3B in outflows for the week ending Wednesday – the highest since June of 2022, according to LSEG Lipper. Trading activity also achieved new highs, with Wednesday the 9th marking the highest trade count on record, according to MSRB (data dating back to 1995). The 112,660 transactions were substantially higher than the 10y historical daily average of around 42,000 trades. In terms of par value, Wednesday was the third highest on record, recording $32.5B in trading volume (behind 03/19/20 and 03/20/20 - $34.9B and $37.3B, respectively). Tradeweb Direct saw sizable increases in trading among all client segments with the spike in BW lists, which saw strong participation from both our dealer and buyside liquidity providers looking to deploy capital into rare opportunities. Buy/sell ratios for the week closed at 1.6 for dealers (from 0.8), 3.7 for retail (from 2.4), and 0.5 for institutional (from 1.3).
The new issue calendar for the week ahead is estimated at $8.9B, although market volatility and a shortened trading week may put additional deals on the sideline. Notable deals include: NYC GO ($1.75B, txbl), Department of Airports for the City of Los Angeles ($1.47B), Oregon GO ($462mm), Dormitory Authority of the State of New York ($466mm, Sloan Kettering), Jersey City Municipal Utilities Authority ($252mm), Houston ISD ($186mm), North Carolina GO ($300mm, COMP).
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Proportion of muni buys vs. sells by client type on the TWD platform.
For the avoidance of doubt, a ratio < 1 indicates net selling activity.
Relative number of bid wanted requests sent to the TWD platform by client type, indexed to the first month in the time series.
Number of municipal inventory line items available on the TWD platform daily by liquidity provider type.
Municipal notional (000s) offered on the TWD platform daily by liquidity provider type.
Number of unique municipal CUSIPs offered daily on the TWD platform daily.
Number of unique liquidity providers offering municipals daily.
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