Fixed income

The lineup of exclusively short-duration fixed-income products, taxable and municipal, still managed an overall gain.

Municipal bonds have a direct effect on the social and cultural character of cities, metropolitan areas, counties, and states. Munis and the initiatives they support such as public education, housing subsidies, public transit systems, and more, can often be linked to local or regional politics. Join Lynne Funk, Executive Editor at The Bond Buyer and Destin Jenkins, Neubauer Family Assistant Professor of History at the University of Chicago as they explore how municipal bond mismanagement can have contrasting influences on the different ethnic groups in our cities.

The top 20 performers nearly doubled the gains of their peers over the period.

Exactly one year after record billions were pulled from municipal bond mutual funds and the market was in free fall, municipals followed U.S. Treasuries this week as the markets continued to dismiss the Fed's outlook on inflation and rates.

The Treasury Department’s $60 billion sale of two-year notes on Tuesday broke one of the few remaining records of the low interest-rate era.

With the U.S. Treasury sell off, municipal to UST ratios fell below 55% in 10-years.

Robin Marshall, director of fixed income research at FTSE Russell, talks about what investors should be paying attention to during the coming year. He looks at inflation prospects, possible Central Bank actions and the continuing effects of the COVID-19 pandemic. Chip Barnett hosts. (15 minutes)

Muni yields have been in a nine-basis point range since the beginning of the year while UST yields have fluctuated more than 20 basis points. With so little supply, muni credit spreads continue to compress.

Tax-exempt performance is dependent on what supply looks like versus taxables. The 30-day visible supply shows more than 30% taxables on tap, though some analysts say the taxable increase makes exempts more attractive.

It was inevitable that muni yields would need to rise somewhat as the UST 10-year broke above 1%, however participants said the supply/demand imbalance will keep munis from rising as quickly as Treasuries. More than $1 billion inflows reported.

Dominick D'Eramo, head of fixed income at Wilmington Trust Investment Advisors, talks with Chip Barnett about how the municipal bond market did in 2020 and what may be on tap for munis in the new year. (12 minutes)

Michael Ruvo, president and CEO of BondWave, talks about how he thinks technology changes — and the data that enables those changes — will help with market transparency and make for a more efficient market overall. Lynne Funk hosts. (21 minutes). Recorded Dec. 4.

ICI reported another $2.3 billion of inflows, new deals continue the march to lower yields and benchmarks rose a basis point seven years and out for the first time since the beginning of December.

The state of Illinois sold $2 billion of three-year notes to the Federal Reserve's Municipal Liquidity Facility at 3.42%.

Even with COVID-19-related shutdowns — a New York City lockdown may be imminent — issuers are pricing bonds into an extremely low-rate environment.

Strong technicals, low supply, yield-seekers keep munis outperforming.

The primary's diversity of credits and size relative to November has grown, but it is just not enough to push yields higher as redemptions flood the market. Some analysts still say a mild correction at least is due.

Refinitiv Lipper reported inflows of net $201 million for the week ending Dec. 2, down from $386 million the week prior.

Until supply increases, year-end demand has munis outperforming. ICI reports another multi-billion week of inflows.

Munis are likely to lag Treasuries in some fashion once year-end empathy settles in mid-month and ratios become a factor.