Primary bond market

"It's good news/bad news for fixed-income markets," said Nuveen strategists Anders S. Persson and Daniel J. Close.

Since the 52-week low on April 12, yields have risen by an average of 46 basis points.

"Ultimately, the case for fixed income generally, and munis specifically, is much stronger today than it was a year ago," said Nick Vendetti, municipal bond fund portfolio manager with Allspring Global Investments.

For the week, triple-A muni yields rose between 11 and 29 basis points, according to MMD, while UST yields rose 11 to 32 basis points.

"Steep corrections occurring inside 10 years on the curve reflect an ongoing process to reduce a deep inversion," said Kim Olsan, senior vice president of municipal bond trading.

The Investment Company Institute reported investors pulled another $290 million out of municipal bond mutual funds in the week ending May 10.

The up to $600 million of airport revenue bonds, which are slated to price in July, will continue funding for the reconstruction of the terminal and concourses.

The market is seeing a supportive environment for munis, said Nisha Patel, managing director of SMA Portfolio Management at Parametric.

The county began exploring a new facility eight years ago. Studies concluded the current facility was ill-equipped to deal with overcrowding, in poor physical condition and its design fell short of current standards.

"With rates volatility seemingly subsiding in the past few weeks, we could start to see outflows decrease and demand flow back into munis," according to AmeriVet Securities' Jason Wong.

Investors will be greeted Monday with a new-issue calendar estimated at $6.018 billion with a few bellwether, triple-A names coming from Loudoun County, Virginia, Frederick County, Maryland, and Columbia University with sizable deals.

Banks reduced their quarterly muni holdings during the first quarter at the fastest rate in 20 years, per Municipal Market Analytics.

"Our ratings reflect the progress the city has made over time on important issues like rebuilding reserves and improving the health of our pension fund," said Philadelphia Treasurer Jackie Dunn.

Outflows were seen again from municipal bond mutual funds, though they lessened this week as Refinitiv Lipper reported $101.664 million was pulled as of Wednesday.  

The CPI numbers coming in pretty much as expected "was a relief" to the markets, with the bond market rallying after the release, said Luke Bartholomew, senior economist at abrdn.

Despite the attraction for new issues, sources said there is still uncertainty overall in the municipal market stemming from the regional banking crisis.

Now that there is more "clarity from the Fed on the path of interest rates, both investors and issuers may start to move off the sidelines," said Daniel Close, head of municipals at Nuveen.

Investors will be greeted Monday with a new-issue calendar estimated at $7.588 billion.

"The SLGS window closed after we released the pre-marketing wire and had already signed off on the cashflows," which assumed the use of SLGS, city Auditor Megan Kilgore said. "I've had the SLGS window close the same week, even within a day or two of pricing, but not without any advance notice."

The secondary was quiet and the sole deal of size came from a $400 million-plus competitive water and sewer loan from Portland, Oregon. The recent rise in yields makes for more compelling levels.