Investor demand for tax-exempts remained tepid as outflows from muni bond funds for the week of July 10 accelerated to $1.2 billion from $870 million the prior week.
While the numbers from Lipper FMI paled before those of two weeks ago, when the market experienced a record $4.53 billion in outflows, they were still significant, climbing above $1 billion for the fifth time in six weeks.
The muni market since last Friday posted a stable, if unspectacular week. Selling pressure in the secondary market balanced decent reception for deals in the primary.
Triple-A tax-exempt yields beyond the front end of the curve rose and then fell over the period. The 10-year leaped nine basis points on the week until Thursday, when it fell eight basis points to land at 2.67%.
The 30-year jumped 11 basis points before falling five basis points to 4.01%. The two year tumbled seven basis points on the week to 0.45%.
Assets for all muni funds that report their flows weekly fell to $301 billion. The previous week they reported the first gain in a month, to $304 billion.
The value of the holdings for weekly reporting funds plunged $2.58 billion. The week before, they rose $2.36 billion.
The four-week moving average for all municipal bond mutual funds that report their flows weekly was $2.21 billion of outflows, compared to $2.31 billion of outflows the week before.
Outflows continued for the 19th straight week for long-term muni bond funds that report flows weekly, at $836 million. Long-term bond funds reported $201 million of outflows the previous week.
And flows for weekly reporting high-yield muni bond funds jumped back into red, at $207 million. The previous week, they reported $141 million in inflows.
Assets for high-yield funds that report their flows weekly fell to $39.06 billion, from the $39.78 billion reported the week before.
The value of the holdings for high-yield funds dropped by $513 million. Last week, they rose by $501 million.
The four-week moving average for all high-yield municipal bond funds that report their flows weekly showed $529 million of outflows, off from $641 million of outflows the week before.