Markets

Nearly all The Bond Buyer's weekly yield indexes were somewhat lower this week on the whole, as municipals showed gains but lagged behind a massive Treasury rally.

After a one-week blip that showed some positive growth last week - following two prior weeks of outflow activity - tax-exempt money market funds returned to negative territory, losing $4.11 billion and settling with total assets of $492.47 billion for the week ending Nov. 17, according to the Money Fund Report.

Municipal bond exchange- traded funds have suffered a baptism by fire in their first year of existence.

A pair of deals from issuers in Massachusetts and California will headline this week's primary market, where an estimated $4.32 billion is expected to offer the largest - and most notable - increase in new-issue volume since the recent economic turmoil that put the municipal market in a deep freeze over the last six to eight weeks.

The exodus of cash from municipal bond mutual funds appeared to slow last week.

The Bond Buyer's weekly yield indexes declined this week, as tax-exempt yields fell in each of the holiday-shortened week's sessions.

With November well under way and the presidential election over, tax-free mutual funds saw inflows for the week ended Nov. 10, drawing in $1.59 billion and ending the week with $496.58 billion in total assets, according to the Money Fund Report.

Amid continued strong demand and recent firmness that saw some yields decline as much as 12 basis points in spots during new-issue pricing last week, a $750 million revenue offering from the New Jersey Transportation Trust Fund Authority will further test the strength of the market this week.

Weekly reporting municipal bond mutual funds had a net outflow of $253 million during the period ending Nov. 5, AMG Data Services reported.

WASHINGTON - The Treasury Department's plans to issue more than $1 trillion in Treasury securities in fiscal 2009 to help raise revenues for the financial rescue plan are likely to further the recent pronounced move of municipal bond yields above Treasury yields, market participants say.