Buy side

While taxable money market funds are still seeing healthy inflows, tax-exempt funds suffered outflows of $1.96 billion for the week ending Oct. 27 - a stark comparison to last week's inflows of $7 billion and the gains of the last three weeks in general, according to the Money Fund Report, a service of iMoneyNet.com of Westborough, Mass.

As the government weighs bold steps to aid homeowners facing foreclosure, new data shows how big the problem has become.

Most of The Bond Buyer's weekly yield indexes increased this week, as last week's rally ebbed Monday and was followed by several mostly weaker sessions.

A pair of deals from two New York municipalities and a Texas sale will headline an estimated slate of $4.47 billion in total new-issue supply in the primary market this week - more than double the revised figures from last week - as municipal volume continues to show signs of recovery from the month-long dry spell inflicted by the nation's financial and economic turmoil.

Weekly reporting municipal bond mutual funds had a net outflow of $1.126 billion during the period ending Oct. 15, AMG Data Services reported.

The Bond Buyer's weekly yield indexes plummeted this week, after a sizeable rally Tuesday led to a historic one Wednesday, and the market then held firm yesterday.

Amid increased demand and liquidity in the short-term market, inflows kept tax-exempt money market funds in positive territory for a third week in a row, gaining $7 billion in new cash for the week ending Oct. 20, according to the Money Fund Report, a service of iMoneyNet.com.

Following the pricing of last week's $5 billion revenue anticipation note sale by California, both the short- and long-term primary markets will be much more subdued this week, with only a handful of negotiated deals expected to be priced by issuers willing to enter the market at the prevailing higher interest rates.

Weekly reporting municipal bond mutual funds had a net outflow of $2.285 billion during the period ending Oct. 15, AMG Data Services reported.

SAN FRANCISCO - The Bond Buyer's weekly yield indexes surged this week, as the market continued to struggle against a wave of capital rushing to exit.

For the second week in a row, tax-free money market funds showed signs of slow but steady recovery, demonstrated by the arrival of $6.12 billion in new cash, which caused assets to inch up to $490.86 billion for the week ending Oct. 13, according to the Money Fund Report, a service of iMoneyNet.com.

A quest for cash in a highly illiquid market and a lack of investor confidence in the tax-exempt bond market in general are among the factors that have sent the yield for The Bond Buyer 40 Bond Index soaring in recent days.

The arrival of a handful of new issues this week will help revive the recently lifeless primary market after it all but shut down for nearly the last month.

Weekly reporting municipal bond mutual funds had a net outflow of $1.1 billion during the period ending Oct. 8, AMG Data Services reported.

Nearly all The Bond Buyer's weekly yield indexes increased this week amid "very sloppy" conditions in the municipal market.

Outflows have continued to slow and more new cash has begun to find its way back to tax-exempt money market funds over the last week.

Amid the ongoing turmoil that plagued the financial and credit markets in the first half of 2008, the nation's commercial and savings banks experienced slight negative growth in their municipal bond portfolios. The holdings declined by 1.0% to $142.7 billion on a cost basis and by 2.7% to $141.1 billion on fair-value basis through June 30, according to data from Sheshunoff Information Services Inc.

The deep freeze that the primary market has endured the last two weeks may begin to thaw a bit this week, aided by the much-anticipated news on Friday that the House approved the $700 billion financial rescue plan. But some market participants said it was too early to expect new-issue business to bounce back quickly given that the nation's economic crisis is far from over.

Weekly reporting municipal bond mutual funds had a net outflow of $848 million during the period ending Sept. 24, AMG Data Services reported.

The Bond Buyer's weekly yield indexes rose this week, amid continued market turmoil and uncertainty over a federal bailout package.