Secondary bond market

U.S. Treasuries gave little direction Monday, holding ratios and yields steady, leading most participants to argue both are satisfactory to ride out the summer.

Municipal bonds ended the week unchanged for the sixth consecutive trading session as inflows surged as more than $7 billion is headed to market next week.

Municipals were unchanged for the fourth consecutive day this week amid slight Treasury strength as demand for yield continued.

Demand was brisk in the primary market while the short-term market traded sideways on the pressure from the heavy new issue calendar, the release of the FOMC minutes and Treasury auction.

The Puerto Rico Aqueduct and Sewer Authority sold $813 million of senior lien revenue bonds consisting of tax-exempt refunding, taxable refunding and forward delivery refunding bonds.

As New York City launched the first of its two-day retail order period on $1.039 billion of GO bonds, the market was uneventful ahead of $9.76 billion in the primary market this week

The short end of the muni market saw trading of larger blocks at or below benchmarks but yield curves were little changed on a summer Friday.

Refinitiv Lipper reported $1.87 billion inflows. A solid demand component for the market, but some suggest the move into bonds from equities is more an asset reallocation than investors keen on fixed income.

Another $2 billion-plus was reported flowing into municipal bond mutual funds in the latest week, continuing to be a supportive demand component for munis.

The increasing influence of institutional market participants is even stronger in the taxable muni sector, a Municipal Securities Rulemaking Board report finds.