The tax-exempt market ended three basis points stronger Tuesday as the week’s largest deals, including Texas and California, priced. Still, traders expressed doubts about the firmer tone and said it was unlikely to last.
“The market seems to feel better, but what’s disconcerting is $21 billion exiting muni-only funds,” a Texas trader said, referring to the net outflows in the past 25 weeks, as reported by Lipper FMI. “It’s controlled selling. And retail is still a net seller at least on the fund side.