Muni yields were cut on Thursday, as U.S. Treasuries saw slight weakness and equities ended lower.
Muni yields were cut by three to seven basis points, depending on the scale USTs saw yields rise up to two basis points.
Munis are in "regroup mode," according to Kim Olsan, senior fixed income portfolio manager for NewSquare Capital. She expects the correction to be modest and not damage supply or demand.
"When you go past 10 years, the activity has been fairly strong, but ratios got ahead of themselves," Olsan wrote. UST yields hit a point where "people start to kind of relook at where things are, and they're gonna probably adjust bid size based on that."
Fund flows
Investors added $1.36 billion into municipal bond mutual funds in the week ended Wednesday, following $1.376 million of inflows the prior week, according to LSEG Lipper data.
High-yield funds saw inflows of $265.5 million compared to inflows of $108.8 million the previous week.
Tax-exempt municipal money market funds saw outflows of $5.108 billion for the week ending July 13, bringing total assets to $146.332 billion, according to the Money Fund Report, a weekly publication of EPFR.
The average seven-day simple yield for all tax-free and municipal money-market funds was 1.72%.
Taxable money-fund assets saw $66.915 billion pulled, bringing the total to $7.723 trillion.
The average seven-day simple yield was 3.33%.
The SIFMA Swap Index was at 2.91% on Wednesday compared to the previous week's 1.82%.
New-issue market
In the primary market Thursday, Goldman Sachs priced for the California Community Choice Financing Authority (Aa2///) $948.325 million of clean energy project green revenue bonds, Series 2026G, with 5s of 10/2029 at 3.53%, 5s of 2031 at 3.73% and 5s of 2034 at 4.10%, callable 7/2034.
