Thursday, Jun. 18, 2015

Municipal Bond Market
Munis are stronger this morning after mixed trading post-Fed yesterday.  We saw extremely strong demand in the front end of the curve; however, we continue to see very few buyers of long end paper.  The amount of items out for the bid continues to drop as dealers attempt to take advantage of the strength in Treasuries.  The primary should be quiet for the remainder of the week with most of the larger deals already priced.  30-day supply is lighter this morning with about $10.5.bln on tap over the next 30 days, versus $12.5bln yesterday.

PR debt continues to be extremely quiet as we approach July 1st payments.  We continue to see below average volume in benchmark GOs.  It seems that most institutions have positioned themselves and are just sitting on bonds until we receive more clarity from the island.  Bonds continue to trade below $80 (10.42%) again after trading as high as $83.00 (9.95%) in early June.  2000m traded yesterday @ $79.875 (10.41%).

30-Day visible supply: $10.5bln