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Friday, May 24, 2024
 

MANAGING DIRECTOR:
Scott Carrithers
 
PORTFOLIO SALES AND SERVICE:
Chris Thompson • Sean Doherty • Kevin Doyle • Mark Tranckino
Natalie Regan • Aaron Stoffer • David Farris • Lonnie Harris • Brian Schaff • Jeff Macy
Josh Kiefer • Tom Toburen •  Todd Czinege

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
05/17/24 5.37 5.40 5.37 5.13 4.83 4.61 4.45 4.43 4.42 4.66 4.56
05/20/24 5.38 5.40 5.37 5.15 4.85 4.63 4.47 4.45 4.45 4.68 4.59
05/21/24 5.37 5.39 5.37 5.14 4.83 4.60 4.44 4.42 4.41 4.65 4.55
05/22/24 5.36 5.41 5.38 5.17 4.87 4.65 4.46 4.44 4.42 4.65 4.54
05/23/24 5.37 5.41 5.39 5.20 4.94 4.71 4.53 4.50 4.48 4.66 4.58

The data in the table above is static as of the time it was pulled, so rates may have changed. Treat all data in this table and PMR as indications only and availability is
always subject to change.   This information was pulled manually from sources we believe to be reliable. New source, as of 12/12/2022, Bloomberg, L.L.P.  As of:    close of  business 5/23/2024.
                                                                                                                                                                                       
 

Municipals Supply/Demand Dynamics
 

Earlier this week we sent out a timely article titled “Time To Pick Up Tax Free Yield” discussing the improvement in the value of municipal bonds compared to other asset classes. Municipals have finally come off of historically low treasury ratios – largely driven by heavy spring issuance. Municipal issuance is up over 35% YoY and up 16% over its 5-year average, pushing yields higher as buyers work to digest the new inventory.
 
 
But, where do we go from here? Municipals have historically become more expensive relative to treasuries in the summer months. This is largely due to supply imbalances swinging back the other way. With the Memorial Day weekend just ahead and summer activities picking up, there is typically a reduction in the amount of debt issuers bring to market during the months of June and July. Combined with June 1st being the largest maturity date issued, this creates a market environment where there is a disproportionate amount of funds coming available to reinvest. 

Below, you can see the change in muni-treasury ratios in June over the past three years. All of which show the tightening of spreads. Aka, Municipals becoming more expensive.
 
Below, are the Maturities and Redemptions for June 1st over the past three years. 
 
Typically buying Municipals in late May, before ratios head lower, is a great way to use the cyclical nature of the supply/demand dynamics of the market to your advantage. If you have any interest in learning more about current Municipal Bond rates, please reach out to your CCB representative. 


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.

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