Primary bond market

For the week ending Wednesday, outflows lessened as Refinitiv Lipper reported $91.713 million was pulled from municipal bond mutual funds after $194.097 million of outflows the week prior.

Outflows continued with the Investment Company Institute reporting investors pulled $128 million from mutual funds in the week ending March 29, after $693 million of outflows the previous week.

Outside of economic data, "a light forward calendar is driving strong demand in the secondary market and with new issues, with some deals being significantly oversubscribed," SWBC's Roberto Roffo said.

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.

Yields on top-rated municipal bonds fell as much as nine basis points on Friday as bank contagion fears resurfaced and investors looked to safe-haven securities. The primary calendar is rebounding, with volume rising to an estimated $5.4 billion in the week ahead.

Outflows continued as Refinitiv Lipper reported $427.082 million was pulled from municipal bond mutual funds in the week that ended Wednesday after $461.123 million of outflows the week prior.

"In short, it appears that the end of the current tightening cycle is coming into view," said Wells Fargo Securities Chief Economist Jay Bryson.

After a tumultuous week, expect another ahead, said Matt Fabian, a partner at Municipal Market Analytics.

The state plans to enter the market before the fiscal year closes June 30th with eyes turned to Fitch and whether it will follow Moody's and S&P with an upgrade.

The banking sector crisis caused a flight-to-quality bid in USTs last week.

Investors will be greeted Monday with a new-issue calendar estimated at $4.064 billion.