Markets

The Bond Buyer's weekly yield indexes declined this week, as the municipal market grew firmer in each of the week's sessions.

Almost a year after barreling past a previously unprecedented milestone, municipal bonds have returned to that milestone - coming from the opposite direction.

After a lull in supply during the last two weeks, the first week of February will kick off with noticeably more vigor thanks to at least two significantly sized deals - a $950 million California school deal and a $614 million general obligation sale in the Southeast.

Inflows into municipal bond mutual funds slowed last week as the muni market drifted lower.

James Colby, senior municipal strategist at Van Eck Global, admits the timing is pretty fortuitous.

Tax-free money market funds lost $7.69 billion - more than triple the outflows of the previous week - causing total assets to settle at $493.41 billion for the week ending Jan. 26, according to the Money Fund Report, a service of iMoneyNet.com of Westborough, Mass.

The Bond Buyer's weekly yield indexes rose this week, despite a modest late-week rally that ended a near two-week string of losses.

Philip G. Condon knows his history.

The municipal bond yield curve is the steepest in more than a quarter-century as investors continue to shun long-term munis in favor of short-term debt.

Cash continued to pour into municipal bond mutual funds last week as investors shrugged off a dip in the muni market and persisted in chasing relatively high tax-exempt yields.