Jessica Lerner

"Decelerating or slowing economic growth has sparked a classic flight-to-quality trade with short-term Treasuries being the prime beneficiary," said Gary Pzegeo, head of fixed-income at CIBC Private Wealth U.S.

Data shows the average bids per competitive sale is up noticeably over the past few quarters, Justin Marlowe said, rising to 8.5 bids in Q1 2024 from 6.1 bids in Q1 2022.

All eyes now turn to the September Federal Open Market Committee meeting where the Fed is expected to cut rates, but market participants are mixed on whether it will be a 25- or 50-basis-point cut.

Muni ETFs have grown in popularity ever since the first launch in 2007, gaining a foothold due to their cost-effective nature and ability to help investors acquire a significant amount of diversification.

Municipal bond mutual funds saw inflows as investors added $1.112 billion to funds after $892.2 million of inflows the week prior, according to LSEG Lipper.

"The Fed remains data dependent as always, but it now appears that the 'more good data' bar is not as high as it was before, particularly with labor market developments becoming more important," said Michael Gregory, deputy chief economist at BMO Economics.

Issuance was lumpy in July, with three weeks of $10 billion issuance sandwiched between lower issuance due to the Fourth of July holiday at the start of the month and the FOMC meeting the last week.

Yields may move lower after the Federal Reserve "communicates its goals to ease policy in coming meetings," said Tom Kozlik, managing director and head of public policy and municipal strategy at HilltopSecurities.

"The overall muni market appears to be in a good balance despite the hefty slate of primary issuance that has occurred over the past few months," Birch Creek Capital strategists said.

U.S. Soccer will issue $200 million of tax-exempt revenue bonds through the Fayette County Development Authority. 

With Antonelli's hiring, IMTC will be able to more efficiently scale fixed-income management and maximize alpha opportunities for clients, the firm said.

The muni market tends to have "remarkable patience" in relation to USTs, said BofA strategists.

Despite munis being mixed Thursday, the muni AAA yield curve remains inverted, said Taylor Huffman, a client portfolio manager at PTAM.

Municipal bond insurance grew 24.4% in the first half, compared to the same period last year.

"While supply has been outsized over the last several weeks, the market has also seen outsized reinvestment demand over the last several months," said Nuveen strategists.

This week again sees elevated supply, as issuance sits at $9.673 billion, with Tuesday being a very busy day.

The initial reaction was a little bit a flight-to-quality trade in rates, which is supportive of USTs and munis as safe-haven assets do well during times of uncertainty, said Chris Brigati, senior vice president and director of strategic planning and fixed income research at SWBC.

The high-yield sector continues to show strength, with inflows of $364.4 million for the week ending Wednesday, marking 13 straight weeks of inflows, according to LSEG Lipper.

The new-issue calendar is at $9.7 billion the week, led by the Texas Transportation Commission with $1.7 billion of first-tier and second-tier revenue refunding bonds.

Municipal bond mutual funds saw inflows as investors added $891.4 million to funds after $775.3 million of inflows the week prior, according to LSEG Lipper.