Buy side

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.

California Gov. Jerry Brown proposes paying off the state's long-term debt, including all economic recovery bonds, and adding to its rainy day fund in his $106.8 billion general fund spending plan.

Los Angeles is hosting its 2nd Regional Investor Conference 2014 on Feb. 26-27 at Universal Studios and Paramount Studios.

Thornburg Investment Management has launched a low duration municipal bond fund aimed at investors looking for a tax-exempt income stream as interest rates rise.

The municipal market will see the first substantial influx of new issue volume this week after a holiday lull that was marked by few new bonds.

The municipal bond market capped a light year of issuance with a 6% drop in long-term volume in December.

Outflows from municipal bond mutual funds persisted for a 32nd straight week, at $1.47 billion.

Muni bond funds that report flows weekly recorded outflows of $1.49 billion for the week of Dec. 25, down from $1.71 in the week prior, Lipper FMI numbers showed.

Outflows, weak supply, rising interest rates, and mediocre returns are forecast for the municipal market as it rings in 2014 — in other words: more of the same.

Light issuance and the Federal Open Market Committee's decision to taper its bond-buying program drove the municipal market on the pre-holiday week.