Investment funds

The New York Fed has called on regulators to issue updated rules on money market funds, but the market effects are quickly transforming the market.

More outflows from municipal bond mutual funds were reported as bid lists surpass $1 billion 22 times in 2022.

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Outflows continue but dropped significantly in the latest week with Refinitiv Lipper reporting $662 million of outflows from municipal bond mutual funds following $2.823 billion the week prior.

As municipals continue to underperform the moves in U.S. Treasuries, current ratios are attractive and present a buying opportunity.

ETFs pulled in just more than $2 billion in February while muni mutual funds saw $8.5 billion of outflows.

Ongoing turmoil in the Ukraine is roiling markets, municipals included. Refinitiv Lipper reported more outflows, with high-yield seeing $818.218 million pulled out in the latest week.

Investors yanked $1.154 billion out of municipal bond mutual funds in the latest week, Refinitiv Lipper reported.

The Investment Company Institute on Wednesday reported $3.120 billion of outflows in the week ending Feb. 16, up from $993 million of outflows in the previous week.

Refinitiv Lipper reported outflows after inflows of $216 million the previous week.

Washington will bring $742 million of general obligation bonds in competitive sales Tuesday, providing guidance for triple-A benchmark yields.

Municipals were stronger again on the day, though, and new-issues were repriced to lower yields.

The UST selloff and rate fears spooked investors in January, but experts predict more opportunity and a stronger tone for munis in the remainder of the first quarter.

Short-end muni yields have risen more than 30 basis points on some triple-A scales over the past five trading sessions.

Returns are deep in the red with the Bloomberg Municipal Index at negative 1.85%, while high-yield sits at negative 1.81%.

Refinitiv Lipper reported $238.926 million of outflows, but $182.035 million of inflows to high-yield, reversing last week's outflows. New-issues faced concessions.

The Federal Reserve expects Omicron to fizzle in weeks, and while pandemic-related risks remain, the economy is strong and the Fed needs to address inflation and could liftoff as soon as March, Bullard says.

ICI reported $1.101 billion of inflows into municipal bond mutual funds for the last week of 2021. Refinitiv Lipper figures on Thursday may give a sense of investor sentiment for week one of 2022.

Municipal volume is estimated at $1.13 billion for the opening week of 2022. Persistently strong net supply challenges will bias credit spreads tighter, credit discipline weaker in the next few years, analysts say.

2022 volume projections are clouded by many uncertainties. What is not murky is that demand for municipals is unlikely to fade.