Economic indicators

The Investment Company Institute on Wednesday reported $2.533 billion of inflows into municipal bond mutual funds, the highest since February.

Tuesday’s data may not be indicative of where the economy is going and will likely be written off by the Federal Open Market Committee at its meeting, analysts say.

Most analysts expect the Federal Open Market Committee will alter its Summary of Economic Projections and perhaps begin to talk about tapering, without offering clues when they'll begin cutting back on asset purchases.

The Investment Company Institute reported $1.089 billion of inflows into municipal bond mutual funds, marking the 13th consecutive week.

The U.S. Treasury 10-year dipped to its lowest yield since March while municipal investors poured money into new deals and secondary trading helped push benchmarks even lower.

Economists are bracing for another volatile monthly jobs report and some forecasters are tweaking their models ahead of Friday's data.

The revenue sector winners in May included healthcare with +0.53% gains, transportation with +0.42%, each benefiting from "the reach for yield and improving metrics," analysts said.

Municipal yields will likely stay in a narrow range with trading activity subdued unless larger interest rate volatility unexpectedly sets in, analysts say.

The fundamentals of the muni market have investors stuck in a low-rate environment without much of an alternative. Refinitiv Lipper reported $1.466 billion of inflows into municipal bond mutual funds with $813.8 million into high-yield.

Triple-A municipal benchmark yield curves were bumped one to two basis points, lagging a four basis point rally in U.S. Treasuries after weaker consumer sentiment and dovish comments from Fed officials moved equities lower.