Muni asset managers are seeking more data from issuers on ESG, yet no agreed-upon set of standards exists, complicating the industry’s relationship with the growing sector.
The 25-basis-point move to higher yields is the largest one-day change in triple-As since March 2020 when COVID began roiling markets. Munis could not ignore a continued selloff in UST led by inflation and recession concerns.
Investors will be greeted Monday with an increase in supply with the new-issue calendar estimated at $6.488 billion, led by $1 billion-plus of GOs from Maryland in the competitive market.
Despite outsized volatility and liquidity challenges ahead, the possibility of relief for munis is not too far off, analysts say, but USTs lead the way for exempts.
Relative cheapness, wider spreads and outperformance in munis is providing better value, all set against a very solid and resilient credit background, analysts say, but supply is testing investor sentiment amid volatility.