The municipal bond market was quiet on Monday going into the New Year holiday week after the Christmas holiday week.
Muni bond prices were higher in early trading, according to Municipal Market Data.
The Week Ahead
No bond or note deals are scheduled for sale, with both the negotiated and competitive calendars devoid of any issues until January.
Secondary Market
High-grade municipal bond prices were higher on Monday. The yield on the benchmark 10-year general obligation dropped as much as two basis point from 2.10% on Friday, while the yield on 30-year GOs declined as much as two basis points from 2.95%, according to a preliminary read of MMD's triple-A scale.
On Monday, Treasury prices were higher, with the two-year note yield falling to 0.71% from 0.74% on Friday. The 10-year yield decreased to 2.22% from 2.25% while the 30-year dropped to 2.79% from 2.82% on Friday.
On Friday, the muni to Treasury ratio remained unchanged. The 10-year muni to Treasury ratio was at 93.3% while the 30-year muni to Treasury ratio was at 105.0%.
MSRB Reports Previous Session's Activity
The Municipal Securities Rulemaking Board reported 11,212 trades on Friday on volume of $1.765 billion.
Most active on Friday, based on the number of trades, was the Bolingbrook, Ill., refunding bonds of 12/29/14 Series A 4s of 2038, which traded 89 times with an average price of 100.551 and an average yield of 3.928%.
Lipper Reports Muni Bond Inflows
In the latest Lipper report, muni bond funds which report weekly posted $659.448 million of inflows in the week ended Dec. 24, after experiencing inflows of $611.055 million in the previous week.
The four-week moving average remained positive at $534.668 million in the latest week after remaining in the green at $510.797 million in the prior week. A moving average is an analytical tool used to smooth out price moves by filtering out fluctuations.
Long-term muni bond funds saw inflows of $156.995 million in the latest week, compared to inflows of $464.214 million in the previous week.
High-yield muni funds recorded outflows of $41.720 million after seeing inflows of $298.631 million in the previous week.
Exchange-traded funds had inflows of $49.986 million in the week ended Dec. 24, after seeing inflows of $91.562 million in the prior week.
Money Market Funds
Tax-exempt money market funds increased $2.73 billion, bringing total net assets to $259.58 billion in the week ended Dec. 23, according to The Money Fund Report, a service of iMoneyNet.com. The new inflows are up from the $2.14 billion inflow in the prior week.
The average seven-day yield for the 396 weekly reporting tax-exempt money funds held steady at 0.1%, while the average maturity decreased by one day to 39 days compared to the previous week.
The 994 weekly reporting taxable money market funds, meanwhile, reported inflows of $22.92 billion, reversing the trends of $1.76 billion in outflows for the prior week. The average, seven-day yield for the taxable money funds remained unchanged at 0.01%, while the average maturity declined one day to 45 days.
Overall, the combined total net assets of the 1,390 weekly reporting money funds grew $25.65 billion in the week ended Dec. 23 to $2.742 trillion, marking the 10th straight week of reported inflows, according to The Money Fund Report.
