With the final result of the U.S. presidential election in doubt, municipal bonds traded significantly stronger on Wednesday following a U.S. Treasury rally of as much as 14 basis points. In secondary trading, yields on AAA munis dropped all across the curve, with some falling by as much as 10 basis points. While the White House race was still undecided, it appears the Senate will not switch and will stay Republican and the House will remain in Democratic control. “Trading in munis remains quite firm, but the pace has slowed somewhat as participants digest the day’s events and set up for the next trade,” said Peter Franks, Refinitiv MMD senior market analyst. He said Treasury yields had fallen by as much as 18 basis points on the long end overnight in reaction to election news, adding that muni yields headed demonstrably lower Wednesday after weeks of adopting a wait-and-see approach.
Source: The Bond Buyer
