JPM Daily Credit Strategy Update: Long-end tax-exempt Munis look rich versus HG corporates, driven by supply divergence; HG Spotlight published

Research evidence excerpt

JPM Daily Credit Strategy Update: Long-end tax-exempt Munis look rich versus HG corporates, driven by supply divergence; HG Spotlight published

J.P. Morgan Securities LLC North America Credit Research

Nathaniel Rosenbaum, CFA AC 16 July 2026 J P M O R G A N

(1-212) 834-2370

nathaniel.rosenbaum@jpmorgan.com

JPM Daily Credit Strategy Update

Long-end tax-exempt Munis look rich versus HG corporates, driven by supply divergence;

HG Spotlight published

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JULI spreads have widened steadily over the past few weeks, +8bp wider MoM to 92bp despite 10y UST yields 10bp higher. On

the other hand, Munis, one of the other major long-duration fixed income asset classes, have continued to grind tighter: 30yr tax-

exempt muni spreads have tightened 14bp over the last month to 55bp, or 30bp through 30y A-rated corporates. This pushed the

corporate/munis spread ratio to 1.54x, near the highest since February 2025 (for the purposes of this analysis, we interpolate an

approximate Muni spread using a 21% tax rate to calculate a tax-equivalent spread). We also monitor this relationship weekly in

our Cross Product Relative Value report and daily in our Credit Relative Value Report. The divergence in this relationship is

notable because both markets are exposed to many of the same duration and macro forces, yet have moved in opposite directions

over the last six weeks despite robust demand for both asset classes with nearly identical YTD flows as a % of AUM ( ~5.8%, see

here).

Figure 1: Long-end Corps at cheapest vs. Munis since February 2025