Jessica Lerner

Triple-A benchmarks were cut two to six basis points across the curve with the largest moves concentrated again on bonds inside 10 years, underperforming Treasuries once again.

Munis are expected to underperform for another few weeks as markets remain volatile and investors reevaluate allocations.

The combination of steady supply, heavy secondary selling and inconsistent demand have moved yields to their highest levels since May 2020.

In the near term, federal aid is sitting on balance sheets ready to be deployed if some of the downside economic risks become reality, experts say.

The Investment Company Institute reported a large drop of inflows into municipal bond mutual funds at $142 million in the week ending Jan. 12, down from $1.413 billion in the previous week.

The 2-, 5- and 10-year UST is higher than before the pandemic began as investors factor in a rate hike as soon as March.

The largest deal of the week comes from the New York City Transitional Finance Authority with $950 million of exempts and $250 million of taxables.

Lamont Financial Services Corp., Swap Financial Group and RBC Capital Markets moved up into the top 10.

BofA Securities led with $62.01 billion of deals. Out of the top five, only Morgan Stanley increased its market share year-over-year.

The Dormitory Authority of the State of New York overtook the state of California for the top spot. Four New York and four California issuers make up the top 10, while some newcomers join the list.

Supply is beginning to roll in and the primary action on Wednesday provided more direction. ICI reports $1.4 billion of inflows.

Other concerns include ongoing threats from the coronavirus, inflation and legislative inertia on muni issues in Washington, according to a Bond Buyer survey.

Munis followed UST weaker while stocks sold off after the employment report, which offered many messages. Analysts believe the bottom line is the Fed will liftoff in March.

The U.S. Treasury selloff caught up to tax-exempts with two to three basis point cuts to scales, but munis still outperform.

FactSet will become the CUSIP system's second operator on behalf of the American Bankers Association.

2022 volume projections are clouded by many uncertainties. What is not murky is that demand for municipals is unlikely to fade.

A HilltopSecurities survey found skilled nursing and senior living as the sectors they were most concerned about for 2022.

Muni bonds have not been not the quick way to big returns in 2021. But for the right client, they are the perfect addition to a portfolio focused on stability and low risk, advisors say.

Investors will also receive $139 billion of interest payments in 2022, about $593 million more than in 2021, according to a report from CreditSights.

U.S. Treasuries saw losses pushing municipal to UST ratios on the 10- and 30-year lower again.