Primary bond market

For four consecutive weeks, triple-A yields have fallen, and munis returned over 2.2% for the month, "a great reversal from February where munis returned a loss of 2.26%," said AmeriVet Securities' Jason Wong.

"Folks are aware of possible pressure that could weigh on the market, but attitudes are still generally more constructive than negative at this time," says Tom Kozlik of HilltopSecurities. 

Outflows continued as Refinitiv Lipper reported $194.097 million was pulled from municipal bond mutual funds in the week that ended Wednesday after $427.082 million of outflows the week prior.

The Irvine Facilities Finance Authority will price $455 million in special tax bonds to develop the Great Park in the Orange County, California, city.

Outflows continued, with the Investment Company Institute reporting investors pulled $693 million from mutual funds in the week ending March 22, after $684 million of outflows the previous week.

The publicly offered tax-exempt debt product is new for the firm and the collateralized debt obligation structure may be one of the first for the market since the 2008 financial crisis.

Munis are directionally trading with USTs but underperforming in days where USTs rally and outperforming in days where USTs sell-off, said Greg Gizzi, head of U.S. fixed income and head of municipal bonds at Macquarie Asset Management.

Munis held "their firmer tone as Treasuries continued to rally once more this past week," said Jason Wong, vice president of municipals at AmeriVet Securities.

The City Council will vote Tuesday night on whether to approve bonds for the formerly stalled project.

Municipals' strong fundamentals and high credit quality combined with market inefficiencies and dislocations present opportunities.