James Ramage

Another subpar week of primary supply probably won't generate much excitement from the municipal bond market.

The lack of supply in the primary and secondary continued to steer the municipal bond market this past week.

Municipal bond mutual fund flows remained strong as they continue to ride a wave of fierce investor demand.

For all of the talk about light supply in the municipal bond market, the month of January still saw an uptick in volume from the same period in 2011.

Janney Capital Markets has expanded the public finance unit in its New York City office with the hiring of two veteran bankers.

Even with an incrementally improving economy, it’s still the simple dynamics of supply and demand that continue to guide the municipal market. And currently, there is still more demand than supply.

Investor interest last week in the tax-exempt market, as reflected by municipal bond mutual fund flows, continued to be strong.

Following a big sell-off last week, the municipal market rallied this week on the latest message from the Fed to pare some of its losses.

KeyBank broadened its coverage of municipal client relationships in the Northeast by opening a New York City office for its public sector group. The bank tapped industry veteran Jose Herrera as a senior vice president and senior relationship manager to run it.

Municipal bond investors have indicated through Thursday's sell-off and trench-scraping yields that the market can handle more primary issuance.

Ratios of municipal to Treasury bond yields over the past three months have shown a degree of volatility that has complicated a standard valuation of tax-exempt debt for investors.

The tax-exempt bond market continues to see marked investor interest through heavy inflows to municipal bond mutual funds.

Through Wednesday, the municipal bond market held to the script drafted for early January 2012.

Investor confidence in munis shifted into a higher gear as municipal bond mutual funds saw the heaviest week of inflows in almost two years.

As far as primary issuance in the municipal market goes, this week's volume should weigh in at levels roughly where January has been so far: light.

A week-long rally pushed municipal bond yields sharply lower, with rates measured by two Bond Buyer indexes falling to levels not seen since 1967.

As part of its effort to further expand its municipal bond business, Mesirow Financial brought in two public finance pros to launch a New York office and enhance its Northeast public finance coverage.

With primary market issuance down significantly in 2011, municipal bond attorneys weren't quite as busy as they have been in years past.

Primary market volume for the week appears to be less than some in the industry expected following last week's paltry pickings. But this should be positive for pricing and involve less need to unload paper.

Most investors agree that municipal bonds in 2012 will not match 2011's robust returns. But there are opportunities at various points in the yield curve and among lower investment-grade credits.