Secondary bond market

The investor-owned utility issues tax-exempt bonds through the Hawaii Department of Budget and Finance.

"The recent outperformance has valuations nearing stretched levels again," Birch Creek Capital said in a weekly report. "If USTs reverse the recent trend higher, we would not be surprised to see munis lag during the rally."

Another day of mixed inflation data led Treasury yields to rise but munis mostly stayed put after underperforming a UST rally earlier in the week. The market is also focused on the $9 billion of redemption flows coming on Tuesday.

Refinitiv Lipper reported $278.559 million of inflows into municipal bond mutual funds for the week ending Wednesday, led by exchange-traded funds.

New York City's $1 billion deal was re-priced to lower yields and a tax-exempt and taxable deal for the NFL's Tennessee Titans new stadium priced.

Municipals followed U.S. Treasuries firmer after markets reacted to the Moody's downgrade of several mid-sized U.S. banks. New issues saw good demand and repriced to lower yields as a result.

While triple-As were little changed the past two sessions, some damage was done last week, leaving market participants generally less optimistic for the final weeks of August.

Late summer is "rarely a good time for our asset class," Barclays strategists said, noting the municipal investment grade index lost money in August three years in a row, and 2023 seems to follow this trend.

Municipal bond mutual fund saw outflows return with Refinitiv Lipper reporting investors pulling $989.852 billion from funds for the week ending Wednesday, led by ETFs and long-end funds.

J.P. Morgan held a one-day retail order for $1.65 billion of revenue bonds from the Dormitory Authority of the State of New York, while Minnesota sold $1.02 billion of GOs in the competitive market in five deals.