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Municipal bonds declined again today, marking the 20th straight session where the 30-year maturity, triple-A credit did not gain. A building new-issue calendar this week and a selloff in the Treasury market made for a difficult day in the tax-exempt securities market.

Meantime, the new-issue market kicked off the week quickly with several large offerings to retail investors this morning. The day also contained a highly watched competitive deal that sold at noon.

In terms of day-to-day total returns:
  • The high-grade, short end of the curve showed a total return of negative 0.001%, according to Municipal Market Advisors (MMA) data
  • .
  • The high-grade, intermediate part of the curve showed a total return of negative 0.02%.
  • The high-grade, long end of the curve showed a total return of negative 0.05%.

The high-grade marketplace of bonds rated double-A or better was stagnant. Based on MMA data, high grades haven't had an up day on a broad scale since Feb. 12. In the time from then until now, there have been only a few days when one maturity or another would show a 1- or 2-basis-point improvement.

Aside from that, the market has been on a gradual decline for over a month. This process could get worse this week as the market will digest a $1.5 billion Wisconsin offering on top of over $6 billion in other deals. Today the bid for high-grades was skittish as most participants are either selling bonds to clear room for the new issues or were sidelined waiting to see what happens.

In the non-investment grade sector of non-rated bonds or triple-B and lower, bonds traded worse than their high-grade cousins. This credit sector continued to get banged up as a few large mutual fund families continue to sell bonds here but really the lack of trading has made price transparency difficult. This is not news for those who have been following the market.

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