Munis little changed as Iran war continues to weigh on markets
Munis were little changed on Monday, as U.S. Treasuries cheapened and equities ended lower.
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Muni yields increased by up to three basis points, depending on scale. USTs cheapened by four to five basis points.
The war in Iran is weighing on most risk assets, according to James Pruskowski, managing director at Hennion & Walsh, and it will probably continue to do so until investors feel they have more clarity on the direction of the conflict and potential inflation. However, Pruskowski said, the underlying conditions in munis will help new offerings find a home.
“I’d say that munis were paused. This is not a regime change in terms of valuations, where markets are trying to find their footing,” Pruskowski said. “At the end of the day, supply — the backdrop to the market — is technically very strong, [with] high levels of supply meeting high levels of demand.”
