Secondary bond market

The larger new issues and aggressive swings in taxables had investors on guard as triple-A curves were pressured outside 10-years, but the asset class still vastly outperformed UST while ICI reports nearly $3 billion more inflows.

Negotiated deals were repriced to lower yields while competitive deals saw levels coming in through triple-A benchmarks. High-grade benchmarks were little changed.

Municipal triple-A benchmarks were pushed to lower yields by one to three basis points across the curve, with the bigger moves out long, but still vastly underperformed the 10-plus basis point moves in UST.

Supply, however, is still less than the massive amounts of cash on hand. Bond Buyer data shows 30-day visible supply at $12.53 billion.

U.S. Treasuries have been volatile the past five sessions, with municipals largely ignoring the ride. Participants mostly have accepted current rates and ratios as large amounts of cash slosh around a market with strong technicals.

Perform, a portfolio management platform for institutional investors who want to accesses the municipal bond market, will be integrated into ICE Bonds.

A key demand component in the market again flexed its muscles with ICI reporting another round of $2 billion-plus fund inflows.

Municipals outperformed U.S. Treasuries for a third sessions moving the 10-year municipal to UST ratio below 60%.

Most participants expect better performance for munis in the near-term. Longer-term, a lot depends on rates, COVID and other outside factors, such as infrastructure.

While municipals hit the pause button Friday, the movement in yields in the first week of July marked the largest one-week decline in 2021.