Buy side

Remarketing $700 million of variable-rate debt last year has helped New York's MTA position itself in a volatile market, finance director Patrick McCoy said.

Municipal bond issuance will stay light in the coming week, rising to $4.89 billion, as the calendar offers little to sate investors' growing hunger for tax-exempt paper.

Bond Buyer indexes slid for the third week in a row.

Inflows to municipal bond mutual funds continued for a second straight week, at just $86 million, for the week ended Jan. 22.

The Massachusetts pension reserves investment trust fund returned 15.2% in calendar 2013, marking an investment gain of $7.9 billion, according to the Pension Reserves Investment Management board.

The primary market will be dominated by new-issue activity in the Northeast, led by a $1 billion Port Authority of NY & NJ consolidated bond issue that will be part of $5 billion of new volume expected.

Municipal bonds continued to rally the past week, with U.S. economic data suggesting a slow recovery just as mutual funds showed renewed investor interest in tax-exempt bonds

Municipal bond demand should increase in 2014 in an environment of expected higher interest rates, improved economic growth, lower issuance and richer valuations to Treasuries.

The Bond Buyer's weekly yield indexes plunged in the week ended Jan. 16.

In another sign of the improving tenor of the municipal bond market, muni mutual funds recorded their first inflows in 34 weeks, Lipper FMI numbers showed.

Tax-exempt money market funds lost nearly half of the robust inflows they accumulated last week, as $2.47 billion of outflows marred the second week of 2014 and reduced total net assets to $272.24 billion in the week ended Jan. 13, according to The Money Fund Report, a service of iMoneyNet.com.

Despite the volatility and uncertainty that saturated the tax-exempt market in 2013, municipal bonds are in high demand at Milwaukee-based Robert W. Baird & Co. due to their attractive risk to reward and overall safety, according to senior vice president B. Craig Elder.

Van Eck Global expanded its line of exchange-traded funds with the debut Tuesday of the Market Vectors Short High Yield Municipal Index ETF, its seventh municipal bond ETF and latest tool for cutting duration and increasing yield potential in a rising interest rate environment.

Standard & Poor's changed its outlook on California to positive from stable based on Gov. Jerry Brown's budget proposal for fiscal year 2015.

A $775 million New York City Transitional Finance Authority offering and a $468 million Minnesota state general fund appropriation bond sale will arrive in the primary market as investors decide how and where to reinvest Jan. 1 coupon payments and redemptions.

Tax-exempt municipal bonds rallied in the first full market week of January, as reinvestment cash hit investor portfolios and government data suggested a sluggish economy.

Municipal bonds remain attractive even after their divergence from Treasuries this past week, industry watchers say, suggesting the recent signs of strength in the market may carry into the new year.

Jefferson County's exit from Chapter 9 bankruptcy sparked interest in general obligation bondholder protections in Alabama, Moody's Investors Service said.

Municipal bond mutual funds recorded their lightest outflows since May 22, when they last registered inflows.

The Bond Buyer's weekly yield indexes slid in the week ended Jan. 9.