Secondary bond market

Powell says the FOMC will consider ramping up tapering when more information about Omicron and its impacts are known, further flattening the UST yield curve.

Economists appear to be less concerned about Omicron, with some saying that even if the variant causes another pandemic wave, it is more likely to "slow rather than interrupt" the global economic recovery.

Municipal yields fell as much as three basis points on Friday as Treasuries soared in a flight-to quality bid as stocks plunged on fears about the emergence of a new COVID variant.

ICI reported $1.43 billion of inflows into municipal bond mutual funds in the week ending Nov. 17, down from $1.61 billion in the previous week.

With the leadership questions mostly answered, the Fed must figure out what to do about inflation. The markets expect the Fed will have to raise rates sooner than planned, and perhaps speed up taper to do so.

This week will be all about the secondary market given that the majority of issuance was priced earlier in the month while Dec. 1 coupon payments should make secondary offerings look attractive.

The Thanksgiving holiday-shortened week, next-to-no supply and few economic data releases should keep munis steady.

Month over month, the municipal market is in a much better position, as heavy demand and flows continue to drive it.

The Investment Company Institute reported $1.608 billion of inflows into municipal bond mutual funds for the week ending Nov. 10, up from $657 million a week prior.

A large new-issue calendar began pricing in the negotiated and competitive markets, with a few deals bumped off the day-to-day calendar.