As the municipal market continues its struggles at the long end of the yield curve, investor demand remains tepid.
Municipal bond mutual funds that report flows weekly recorded outflows of $1.21 billion for the week ended Aug. 14, Lipper FMI numbers showed. Outflows extended into a 12th consecutive week, increasing from the previous one, when they measured $974 million.
Muni yields followed Treasuries higher throughout the week,
The 30-year yield rose nine basis points on the week to 4.37%. The two-year held steady at 0.43% for a 22nd straight session.
Muni ratios to Treasuries all dipped, but remain cheap across the yield curve, particularly at the short and long ends. The 10-year now sits at 103%. The two-year landed at 123%. The 30-year skipped down to 115%.
In general, muni paper with maturities under seven years performed the best, traders said.
Assets for all muni funds that report their flows weekly decreased to $290.9 billion, a sixth straight week of decline. The previous week they reported a $293.2 billion drop.
The value of the holdings for weekly reporting funds plunged $1.06 billion. The week before, they fell $1.12 billion.
The four-week moving average for all municipal bond mutual funds that report their flows weekly was $1.41 billion of outflows, compared with $1.50 billion of outflows the week before.
Long-term muni bond funds that report weekly experienced outflows of $903 million. They've seen outflows for 24 straight weeks, including $880 million last week.
High-yield muni bond funds that report flows weekly also recorded outflows for the week of Aug. 14, at $217 million - the 12th time in 13 weeks. That compares with $209 million they reported the previous week.
Assets for high-yield funds that report their flows weekly fell to $36.98 billion, from $37.46 billion the week before.
The value of the holdings for high-yield funds fell by $262 million. Last week, they fell by $253 million.
The four-week moving average for all high-yield municipal bond funds that report their flows weekly showed $309 million of outflows, from $317 million of outflows the week before.