Economic indicators

Amid a flattening municipal yield curve and inversion of the Treasury market, new issues fared better than the secondary on Thursday as participants prepared for month end.

As of now, returns for the month will very likely end in the red. The Bloomberg U.S. Municipal Index is at -0.40% for the month and +0.39% for the year.

Despite a short-end U.S. Treasury rally, municipals face pressure on the one- and two-year as participants look to month-end positioning.

Profits were up in New York City's securities industry, according to the state comptroller's annual report, even as job losses accelerated.

The Investment Company Institute reported $385 million of inflows while ETFs fell to $124 million.

Triple-A benchmarks saw one basis point cuts in spots inside 10 years while the five-year U.S. Treasury hit a high of 1.154%.

Friday’s data suggested inflation remains a problem, as the voices calling for Federal Reserve action increase.

Municipals outperformed the move in taxables Friday but weakness hangs over the market as fund flows lessen and supply increases. Taxable munis may be keeping exempt rates from moving higher.

For 31 consecutive weeks investors put cash into municipal bond mutual funds but saw just $36.87 million of inflows in the latest reporting period while high-yield funds saw $460 million of outflows after $103 million of outflows a week prior.

ICI reported $704 million of inflows, a $1.1 billion drop from the week prior, bringing the total to $76 billion year to date.