• Treasury yields across all maturities dropped, with the exception of the 30-year bond.

• Muni bond funds continued to see a fifth week of inflows.

• Credit spreads between the 30-year Treasuries and AAA-rated municipal bonds narrowed to a level at which both currently yield 2.99%.

• Be sure to review our previous week’s report to track the changing economic situation.

• The JOLTS report showed that there were around 5.74 million job openings in March, up from around 5.68 million in February. This was marginally higher than the consensus estimates and well ahead of the hirings of 5.26 million. The data indicates that there are plenty of job openings available, just not enough qualified applicants.

• Jobless claims data showed a modest 2,000 decline this week, bringing the total to 236,000. Good news is that this was below the consensus estimate of 244,000 and brings the four-week average up slightly to 243,500.

• Import and export data were released on Wednesday, with imports showing a month-over-month increase of 0.5% and a year-over-year change of 4.1%. Exports showed a 0.2% increase on a month-over-month basis, while also increasing 3.0% on a year-over-year basis. April showed a much stronger bounce back from March’s unexpectedly weak data.

• The Bloomberg Consumer Comfort Index fell considerably by 1.2 points last week to 49.7. However, even though this was a decline from last week’s high measure of 50.9, it still indicates that consumers are very confident in the economy thanks to a strong labor market.

• Consumer Price Index data was released on Friday and month-over-month CPI was 0.2%, which matched expectations. The year-over-year change was 2.2%, slightly below the consensus 2.3% measure.

• Last week, the Fed’s balance sheet increased by $2.2 billion in assets, bringing the total level to around $4.47 trillion. The weekly increase was primarily caused by other assets that rose by $2.6 billion.

• During the week, money supply (M2) increased by $35.4 billion, a very big change from last week’s modest $1.9 billion gain.

Keep track of economic indicators that may impact the muni market.

• Almost all bond maturity yields fell this week, with the exception of the 30-year Treasury. The two-year and ten-year Treasury yields both decreased by 2 bps to 1.29% and 2.33%, respectively. The 30-year Treasury yield remained unchanged at 2.99%. Municipal yields showed more of a decline, with the two-year AAA-rated bonds dropping 3 bps to 0.98%. The ten-year AAA-rated bonds dropped 4 bps to 2.12% and the thirty-year AAA-rated bonds dropped 5 bps to 2.99%.

• Credit spreads were a mixed bag this week, with the largest spread between the five-year Treasury and the AAA-rated municipal standing at 45 bps. 30-year AAA-rated municipal bonds yields dropped 5 bps this week and now provide the same yield compared to its 30-year-old Treasury counterpart.

Be sure to check our Market Activity section to keep track of daily muni trades and historical trades of muni CUSIPs across the U.S.

• For the fifth week in a row municipal bond funds show inflows, amounting to $575 million this week.

The Geisinger Authority Health System of Montour County, Pennsylvania issued over $586 million of revenue bonds this week. The Series 2017A issue contains over $350 million bonds while the Series 2017A-1 issue contains over $236 million bonds. The bonds are designed to help fund the physician-led, integrated health organization that includes seven hospitals and other medical buildings. The bonds are rated Aa2 by Moody’s and AA by S&P. To browse credit reports of other muni bonds issued by the State of Pennsylvania, click here.

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Moody’s upgrades to Aa3 Beaumont Unified School District, CA’s outstanding GO Bonds: Moody’s upgraded $56.6 million outstanding bonds of the Beaumont Unified School District to Aa3 from A1. The rating change is due to the growing residential tax base of the area, which is backed by a strong financial profile and stable reserves. To explore additional credit reports about other muni bonds issued by the State of California, click here.

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Moody’s Downgrades Iowa Lakes Community College’s Dormitory Revenue Bonds to A3: The Iowa Lakes Community College had $1.8 million of their Dormitory Revenue bonds downgraded to A3 from A2. Enrollment has shown multi-year declines, which has caused the College’s financial status to deteriorate. To explore additional credit reports about other muni bonds issued by the State of Iowa, click here.

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