Munis were little changed on Thursday as U.S. Treasuries cheapened and equities ended lower.
Munis fell by up to two basis points, but were mostly unchanged, while Treasury yields rose by up to five basis points.
As the muni and UST markets continue to react to headlines from the Middle East, they have been far less responsive to economic data, according to Kevin McGuigan a director at Municipal Market Analytics. The Bureau of Labor Statistics is set to release the April nonfarm payrolls report Friday, but based on experience from the past two months, the market will likely have little reaction to the data.
"I don't believe that a weaker-than-expected nonfarm read will change monetary or Fed policy expectations, because people just think the primary driver is inflation concerns related to the price of oil," McGuigan said. "Even a weak read, I don't think will trigger a rally."
New-issue market
In the primary market Thursday, BofA Securities priced for Mesa, Arizona, (Aa3/A+//) $206.94 million of utility systems revenue refunding obligations, with 5s of 7/2026 at 2.72%, 5s of 2031 at 2.82%, 5s of 2036 at 3.24% and 5s of 2038 at 3.39%, noncall.
Fund Flows
Investors added $1.845 billion into municipal bond mutual funds in the week ended Wednesday, following $636.8 million of inflows the prior week, according to LSEG Lipper data.
High-yield funds saw inflows of $559.6 million compared to inflows of $68.2 million the previous week.
Tax-exempt municipal money market funds saw inflows of $4.109 billion for the week ending May 4, bringing total assets to $147.92 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 2.58%.
Taxable money-fund assets saw $113.428 billion added, bringing the total to $7.589 trillion.
The average seven-day simple yield was 3.34%.
The SIFMA Swap Index was at 2.38% on Wednesday compared to the previous week's 3.09%.
