Primary bond market

Inflows continued with the Investment Company Institute reporting investors added $2.083 billion to mutual funds in the week ending Jan. 18, after $1.982 billion of inflows the previous week.

The 2023 "January effect" seems to be "displaying typical behavior given relatively thin issuance this month and demand patterns that have been buoyed by four of six reinvestment needs," said Jeff Lipton, managing director of credit research at Oppenheimer Inc.

The city received $217 million of retail orders — a rarity in Illinois where local bonds don't benefit from state tax exemption — and interest from 11 ESG funds.

For the first time in several weeks, munis last week outperformed "by a wide margin and across the entirety of the yield curve," said Eric Kazatsky, head of municipal strategy at Bloomberg Intelligence.

Investors will be greeted Monday with a new-issue calendar estimated at $5.520 billion.

The primary "pumped new life into an already-firm market with a lower yield range being established," said Kim Olsan, senior vice president of municipal bond trading at FHN Financial.

Inflows returned, with the Investment Company Institute reporting investors added $1.982 billion to mutual funds in the week ending Jan. 11, after $3.157 billion of outflows the previous week.

The Municipal Securities Rulemaking Board's request for comment on amendments to its primary offering disclosure rule garnered just two submissions.

Chicago put out pre-marketing pricing scales Tuesday on its STSC new money social bonds and refunding tranches and will take retail orders Wednesday with the pricing set for Thursday.

Demand for muni bonds has slowly started make a comeback, with Jason Wong, vice president of municipals at AmeriVet Securities, saying, "this demand is a welcome sign to the tax-exempt sector as rising yields pushed investors to the sidelines."

Gov. Phil Murphy is behind the push for the Garden State to develop offshore wind power, ramping up from 3,500 megawatts by 2030 to 11,000 megawatts by 2040.

Volume for the upcoming week is estimated at $8.34 billion, consisting of $6.30 billion of negotiated deals and $2.04 billion of competitive sales.

Underwriting fees generated for the board totaled some $7.4 million, an almost 50% drop from the $14.3 million the board received in 2020.

Outflows lessened, with the Investment Company Institute reporting investors pulled $3.157 billion from mutual funds in the week ending Jan. 4, after $3.402 billion of outflows the previous week.

The 150-acre facility is expected to create about 200 local full-time positions and between 500 and 1,000 indirect local jobs.

The top municipal underwriters accounted for $359.725 billion in 7,896 issues in 2022, down from $457.080 billion in 11,860 transactions in 2021.

"There was strong demand for the Pennsylvania Housing Finance Authority deal, which was three times oversubscribed," said a New York trader.

Most top 10 issuers are from New York and California, with four from New York and two from the Golden State.

This week's "manageable" calendar will continue what has been a quiet start to the new year in the municipal market, according to John Mousseau, president and chief executive officer and director of fixed income at Cumberland Advisors.

Investors will be greeted Monday with a new-issue calendar estimated at $4.303 billion.