Primary bond market

Buyers appeared to return to the market the past two sessions after the January correction moved yields and ratios higher. Secondary trading was up again on Wednesday and new deals were well-received.

Washington plans to sell the GOs by competitive bid on Feb. 8 to fund various projects.

S&P said the action reflects the Orlando International Airport's financial resilience during the pandemic and its strong passenger recovery trends.

Triple-A benchmark curves were bumped two to five basis points outside of five years as markets calmed to start February.

Market volatility has led to munis seeing the worst performance to start the year since 2018 and the biggest monthly losses since March 2020.

January issuance declined by 14.7% year-over-year amid a rising-rate and volatile environment.

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%.

The statement offered no surprises, but Fed Chair jerome Powell's refusal to denounce more hawkish scenarios hurt market sentiment.

Triple-A benchmarks were cut two to six basis points across the curve with the largest moves concentrated again on bonds inside 10 years, underperforming Treasuries once again.

Munis are expected to underperform for another few weeks as markets remain volatile and investors reevaluate allocations.

The combination of steady supply, heavy secondary selling and inconsistent demand have moved yields to their highest levels since May 2020.

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 Investment Company Institute reported a large drop of inflows into municipal bond mutual funds at $142 million in the week ending Jan. 12, down from $1.413 billion in the previous week.

The 2-, 5- and 10-year UST is higher than before the pandemic began as investors factor in a rate hike as soon as March.

The largest deal of the week comes from the New York City Transitional Finance Authority with $950 million of exempts and $250 million of taxables.

The junk-rated Chicago Public Schools sold $872 million of new-money and refunding bonds into a rockier market for high-yield paper Thursday.

BofA Securities led with $62.01 billion of deals. Out of the top five, only Morgan Stanley increased its market share year-over-year.

For investors in the municipal bond market, 2021 proved to be a year of hurdles. This is likely to change, particularly for investors in the municipal bond market.

The primary led Thursday's firmer tone while Chicago schools faced 10 to 20 bp penalties compared to price talk, signifying investors are being more selective and demanding more in the new higher-yield range.