Municipal bonds outperformed Treasuries on Friday.
Bonds held steady throughout the curve, according to Municipal Market Data's triple-A scale.
Treasuries weakened on the other hand, with the two-year note yield rising by one basis point to 0.54% from Thursday's close. The 10-year also weakened by one basis point to 2.36%, and the 30-year held steady at 3.07%.
Muni traders called the steadiness in the curve a "positive" for munis for the rest of the year. They said this is because Treasuries have been volatile lately and investors may soon see municipal bonds as a safer investment.
The 30-year Treasury yield was 3.21% on September 30, and then dropped to 2.92% by October 15, according to Treasury.gov. Even in November, volatility appeared as the 30-year yield dropped five basis points to 3.04% on November 7th but has since rebounded.
A trader in New York also said the steadiness will help the muni market because it means levels are remaining around the same they were last week after the sell-off.
The benchmark 10-year triple-A GO yield rose by seven basis points to 2.17% on Tuesday from November 3, the Monday the sell-off began. The 30-year yield increased by three basis points to 3.07% during the same period.
The 10-year and 30-year current yields are the same as they were last Friday.
Municipal Fund Flows Rise by 661%
Inflows for all municipal bond funds rose by 661% this week.
Funds that report weekly had $649 million of inflows for the period ending Nov. 12, up from $85.3 million the week before, according to Lipper FMI.
This is the second week in a row fund flows grew. Before that, they had declined for three straight weeks.
Assets of all weekly reporting municipal funds increased to $314.3 billion from $313.7 billion. The four-week moving average grew to $203.1 million from $151.8 million.
Flows for long-term muni funds reversed, as they reported $186 million in inflows after $191.7 million in outflows last week.
Long-term municipal mutual fund assets rose to $165 billion from $164.8 billion last week. The four-week moving average for the long-term funds came in negative with an outflow of $1.2 million, down from $90.8 million last week. This is because the previous four week moving average included the week of Oct. 15 inflow of $554 million.
High yield funds recovered, reporting inflows totaling $127.5 million following inflows of $18.4 million previously. Assets rose to $48.2 billion from $48.1 billion last week. The four-week moving average fell to $29.4 million from $82.7 million.
