Friday, May 25, 2018
MANAGING DIRECTOR: Scott Carrithers   PORTFOLIO SALES AND SERVICE: Steve Panknin • George Morris • Jeff Goble • Chris Thompson • Sean Doherty Kevin Doyle • Lonnie Harris •  Mark Tranckino • Robert Schuyler • Tom Toburen • Josh Kiefer  Nicole Burczyk • Kelley Frye • Natalie Regan • Aaron Stoffer • Chuck Honeywell • Gus Koppen

US Treasury Market
Date	1 mo	3 mo	6 mo	1 yr	2 yr	3 yr	5 yr	7 yr	10 yr	20 yr	30 yr
5/18/18	1.68	1.91	2.09	2.32	2.55	2.71	2.90	3.02	3.06	3.14	3.20
5/21/18	1.71	1.93	2.14	2.35	2.58	2.73	2.90	3.02	3.06	3.13	3.20
5/22/18	1.73	1.93	2.13	2.34	2.59	2.73	2.90	3.02	3.06	3.14	3.21
5/23/18	1.76	1.92	2.11	2.29	2.53	2.67	2.83	2.95	3.01	3.09	3.17
5/24/18	1.74	1.91	2.09	2.28	2.50	2.65	2.82	2.93	2.98	3.06	3.13

                                                                                      Source: U.S. Department of the Treasury, as of 05/24/18  

Municipal Trader’s Perspective
 
As written in yesterday’s PMR, demand for tax-exempt municipal bonds is alive and well.  The drop in the corporate tax-bracket (which impacts only about 25% of the municipal buying public) has been counter-balanced by the drop in supply as municipalities are no longer allowed to issue advance refunding bonds. 

Thus the net effect of tax reform on the overall municipal market has been somewhat of a wash.  Municipal bond prices have continued to hold their ground and have even out-performed treasuries since the beginning of the year.   With short-end municipal/treasury ratios below historical averages, this is not a bad time to liquidate short municipals and consider extending.  Beyond 10 years, it is still possible to attain tax-free yields that are 100% or more of the corresponding treasury.  On a taxable equivalent basis, this can equate to a 4.00% or better return.   

Consider this Kansas bank qualified general obligation bond from a recent new issue which is currently yielding over 107% of the corresponding treasury:
 

 Please contact your Capital Markets representative to discuss further.     
 

                                        

        

This information is intended for institutional investors only. The material provided in this document/presentation is for informational purposes only and is intended solely for private use. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instruments.

•Not FDIC Insured •No Bank Guarantee •May Lose Value