Buy side

Though slipping somewhat from recent numbers, municipal bond mutual funds showed solid interest from investors.

Standard & Poor's lowered more public finance ratings than it raised in the fourth quarter of 2011.

Another subpar week of primary supply probably won't generate much excitement from the municipal bond market.

The lack of supply in the primary and secondary continued to steer the municipal bond market this past week.

Water and sewer utilities will struggle with financing infrastructure projects in 2012, Standard & Poor's says.

The outlook for both state and local governments remains negative, Moody's Investors Service said Wednesday.

Fitch Ratings downgraded nearly six times more public-finance debt value than it upgraded in 2011.

Even with an incrementally improving economy, it’s still the simple dynamics of supply and demand that continue to guide the municipal market. And currently, there is still more demand than supply.

Following a big sell-off last week, the municipal market rallied this week on the latest message from the Fed to pare some of its losses.

Tax-exempt money market funds saw withdrawals for a second week in a row.

Municipal bond yields over the course of U.S. history have reflected fluctuating rates of inflation, changing tax policies and the Federal Reserve's monetary policy.

Investors may be wondering where municipal bond yields are headed after they reached 45-year lows last week.

Municipal bond investors have indicated through Thursday's sell-off and trench-scraping yields that the market can handle more primary issuance.

Ratios of municipal to Treasury bond yields over the past three months have shown a degree of volatility that has complicated a standard valuation of tax-exempt debt for investors.

The tax-exempt bond market continues to see marked investor interest through heavy inflows to municipal bond mutual funds.

Through Wednesday, the municipal bond market held to the script drafted for early January 2012.

A month-long trend of postitive inflows for tax-exempt money market funds came to an end as investors pulled $2.82 billion from the sector in the week ended Jan. 16 and total net assets dropped to $293.75 billion, according to the Money Fund Report, a service of iMoneyNet.com.

Investor confidence in munis shifted into a higher gear as municipal bond mutual funds saw the heaviest week of inflows in almost two years.

As far as primary issuance in the municipal market goes, this week's volume should weigh in at levels roughly where January has been so far: light.

A week-long rally pushed municipal bond yields sharply lower, with rates measured by two Bond Buyer indexes falling to levels not seen since 1967.