Jessica Lerner

The March consumer price index offered little to deter the Federal Reserve from its aggressive plans, but markets saw it as a positive, having feared an upside miss.

Triple-A yields continue to rise, with the two-year muni just below 2%, the five well above and the 10-year approaching 2.5%.

Supply for the holiday-shortened week is $4.8 billion. Municipals performed the worst since 1980 in the first quarter of 2022, but some analysts see the pain subsiding.

Investors pulled more from municipal bond mutual funds in the latest week, with Refinitiv Lipper reporting $3.247 billion of outflows, of that $1 billion was high-yield. ETFs are still seeing inflows.

Investors pulled more from municipal bond mutual funds as the Investment Company Institute reported $4.5 billion of outflows in the week ending March 30.

At least 80% of the fund has to be “ESG leaders,” or issuers that have shown leadership in terms of environmental and social stewardship within their communities relative to their peers and that sector.

Hawkish Fed comments caused UST yields to rise by as much as 17 basis points, just as munis had caught a bid. The new-issue market fared well in digesting large deals amid the volatility.

Municipals have taken a hit in the first months of 2022, but higher yield levels and cheaper ratios have offered possibilities for both retail and institutional buyers, analysts say.

Next week's supply is slated to be $10.166 billion, $8.982 billion of negotiated deals and $1.184 billion of competitive loans. A larger primary calendar is led by two billion-dollar airport deals.

Investors pulled more from municipal bond mutual funds in the latest week, with Refinitiv Lipper reporting $2.038 billion of outflows, up from $1.503 billion of outflows in the previous week.

Total March volume was $39.363 billion in 793 deals versus $47.763 billion in 1,218 issues a year earlier but above the $34.363 billion average.

The Investment Company Institute on Wednesday reported $2.728 billion of outflows in the week ending March 23, down from $3.615 billion of outflows in the previous week.

Without a reversal in UST or municipal bond mutual fund outflows, munis will continue to be pressured.

With massive secondary selling pressure and a larger calendar, credit spreads are likely to continue to widen.

Next week's potential volume is slated to be more than $8 billion, led by $1.25 billion of taxable and tax-exempt future tax-secured subordinate bonds from the New York City Transitional Finance Authority.

Outflows continued, with Refinitiv Lipper reporting investors shed $1.503 billion from municipal bond mutual funds in the week, following outflows of $2.136 billion in the previous week. High-yield saw small inflows.

More outflows from municipal bond mutual funds were reported as bid lists surpass $1 billion 22 times in 2022.

For investors who want a customized portfolio and a greater ability to control taxable events, SMAs may be the product they're searching for.

The triple-A 10-year yield is above 2% on all scales, the highest since March 2020.

Assured Guaranty Municipal Corp. and Assured Guaranty Corp. both resolved their exposure to its insured Puerto Rico debts leading to the upgrade to A1.