Light issuance next week and considerable slowing in the pace of mutual fund outflows kept the municipal bond market steady Friday afternoon despite an already 50-basis-point drop on the 10-year yield this month.
Still, rise in prices and drop in yields weren’t enough to keep buyers out of the market. “The market is about flat and after new issuance this week guys are settling down,” a Virginia trader said. “But generally it seemed like this week was positive. New issuance was well received and flows are still negative but the trend is slowly reversing.”