Markets

Tax-exempt money market funds saw an end to their short-lived period of inflows as $797.9 million fled the sector and total net assets declined to $303.27 billion in the week ended July 18, according to the Money Fund Report, a service of iMoneyNet.com.

The municipal market this week should see its biggest slate of new issuance so far in 2011, with $8.27 billion expected to come to market.

CHICAGO - Moody's Investors Service this week said it views positively recent court rulings in Colorado and Minnesota dismissing litigation that challenged legislative cuts to retirees' pension cost-of-living increases, and expects the rulings will spur other states to act.

Weekly yield indexes fell precipitously this week thanks to a flight to quality among Treasuries coupled with seasonal demand for tax-exempt paper.

Cash flowed into municipal money market funds for a second week in a row, though noticeably less than the billion dollars the industry recouped in the previous week, according to the Money Fund Report, a service of iMoneyNet.com.

Against a backdrop of investors continuing to pull money from tax-exempt bond funds, the municipal market’s first-ever exchange-traded fund to focus specifically on closed-end muni funds has launched.

Municipal portfolio managers say they are finding value in various pockets of the market, ranging from premium bonds to potentially refundable debt.

CHICAGO - Fears expressed by some municipal market participants that cuts in state aid will spawn a wave of local government defaults are overblown, according to a new report by Nuveen Asset Management that examines 12 Cleveland-area issuers.

The biggest deal expected this week is Wednesday's $760 million taxable and tax-exempt offering from the Dormitory Authority of the State of New York, which will be priced by Wells Fargo. A retail order period on Tuesday will precede institutional pricing.