Economic indicators

A disappointing jobs report gives credence to the Federal Reserve’s concern about slack in the labor market.

Refinitiv Lipper reported $584 million of inflows, $341 million of which went to high-yield, as investors pull back on reinvesting to pay tax bills with the May 17 tax filing deadline looming.

Pennsylvania's competitive GO deal saw its yields fall further from recent trading while the North Texas Tollway Authority benefited from positive credit news on the transportation sector and repriced 25 basis points lower. ICI reported another round of $2-billion-plus inflows.

After just one session, the 10-year muni is back below 1% with ICE Data Services and Refinitiv MMD at 0.99% while Bloomberg BVAL is at 0.96% and IHS Markit at 0.95%.

Inflationary pressures remain high while the manufacturing sector continues to deal with supply chain woes that hold it back, analysts said.

Rates, ratios and credit spreads have munis entering May on solid footing, though some pressures due to tax season and rising U.S. Treasuries remain.

Refinitiv Lipper reported another week of inflows at $1.64 billion, with $630 million headed into to high-yield. Benchmark yields rose as much as four basis points following weaker U.S. Treasuries, resistance to ultra-low yields.

Data released Tuesday show an improving economy, which continues to stoke fears of impending inflation. Muni investors await New Jersey's $1.57 billion transportation deal.

The dearth of supply will likely hold down rates and keep certain investors out of the muni market. High-yield municipal bonds, still the most in-demand sector, tightened again.

Refinitiv Lipper reported $1.889 billion of inflows, with $641 million in high-yield. Negotiated deals repriced to lower yields while competitive loan yields were compelling from New Jersey and Los Angeles USD.

Municipal triple-A benchmarks held steady as the focus was on the primary in which large new issues repriced to lower yields while secondary trading was light.

Four out of the six economic indicators released on Thursday surpassed expectations, with consumers tapping their savings to quench pent-up demand. U.S. Treasuries made gains but municipals stood on their own in an impressive two-day rally with insatiable demand.

The economy grew faster from late February through early April while consumer spending increased, with a possible rise in inflation in the near term, according to the Federal Reserve’s Beige Book released on Wednesday.

One-year municipal debt has fallen to record lows with benchmark yield curves at 0.05% and the 10-year muni has fallen below 1% while 30-year muni benchmark yields at or less than 10-year UST.

Rating agency moves on credits across the spectrum are pushing spread-tightening in munis, but the broader economy is still two years away from pre-pandemic levels, according to Federal Reserve Bank of Boston President Eric Rosengren.

Ratios aren't budging as municipal to UST outperformance is not abating. The three largest deals of the week will be taxable, increasing the demand component for exempt paper.

High-yield inflows return to the tune of $821 million. The 10-year triple-A hovers just above 1%.

The Investment Company Institute reported another week of inflows, $800-plus million, as participants focus on that part of the market as an indicator of how munis will fare during tax season.

The services sector showed improvement and employment made big gains in March, but economists note the labor market remains far from full employment.

Nonfarm payrolls rose 916,000 last month while the unemployment rate fell to 6%, and the workforce participation rate edged higher.