Jessica Lerner

The top bond counsel firms combined for a total of $359.123 billion in 7,878 transactions during 2022, down from the $456.136 billion in 11,819 deals in 2021.

Inflows continued with the Investment Company Institute reporting investors added $2.083 billion to mutual funds in the week ending Jan. 18, after $1.982 billion of inflows the previous week.

The 2023 "January effect" seems to be "displaying typical behavior given relatively thin issuance this month and demand patterns that have been buoyed by four of six reinvestment needs," said Jeff Lipton, managing director of credit research at Oppenheimer Inc.

For the first time in several weeks, munis last week outperformed "by a wide margin and across the entirety of the yield curve," said Eric Kazatsky, head of municipal strategy at Bloomberg Intelligence.

Investors will be greeted Monday with a new-issue calendar estimated at $5.520 billion.

The primary "pumped new life into an already-firm market with a lower yield range being established," said Kim Olsan, senior vice president of municipal bond trading at FHN Financial.

Inflows returned, with the Investment Company Institute reporting investors added $1.982 billion to mutual funds in the week ending Jan. 11, after $3.157 billion of outflows the previous week.

Demand for muni bonds has slowly started make a comeback, with Jason Wong, vice president of municipals at AmeriVet Securities, saying, "this demand is a welcome sign to the tax-exempt sector as rising yields pushed investors to the sidelines."

Municipal financial advisors saw $304.569 billion of business in 5,935 transactions in 2022, down from the $377.886 billion in 8,611 deals in 2021.

Inflows returned as Refinitiv Lipper reported $1.981 billion was added to municipal bond mutual funds in the week ending Wednesday after $2.477 billion of outflows the week prior.

Outflows lessened, with the Investment Company Institute reporting investors pulled $3.157 billion from mutual funds in the week ending Jan. 4, after $3.402 billion of outflows the previous week.

The top municipal underwriters accounted for $359.725 billion in 7,896 issues in 2022, down from $457.080 billion in 11,860 transactions in 2021.

"There was strong demand for the Pennsylvania Housing Finance Authority deal, which was three times oversubscribed," said a New York trader.

Most top 10 issuers are from New York and California, with four from New York and two from the Golden State.

This week's "manageable" calendar will continue what has been a quiet start to the new year in the municipal market, according to John Mousseau, president and chief executive officer and director of fixed income at Cumberland Advisors.

Investors will be greeted Monday with a new-issue calendar estimated at $4.303 billion.

Outflows continued as Refinitiv Lipper reported $2.477 billion was pulled from municipal bond mutual funds in the week ending Wednesday after $1.946 billion of outflows the week prior.

Inflation remained the Federal Reserve's focus, but panelists were concerned about its intentions being misread, and none expect rate cuts in 2023, according to minutes of the latest Federal Open Market Committee meeting.

The muni market "is being teed up to enter 2023 from a relative position of strength," said Jeff Lipton, managing director of credit research at Oppenheimer Inc.

The muni market saw $384.086 billion of debt sold in 2022, nearly $100 billion less than $483.234 billion in 2021.