Secondary bond market

Refinitiv Lipper reported $847.068 million of outflows from municipal bond mutual funds, $420.675 million of which was high-yield.

The Investment Company Institute reported investors pulled another $137 million out of municipal bond mutual funds in the week ending May 17, after $290 million of outflows the previous week.

"It's good news/bad news for fixed-income markets," said Nuveen strategists Anders S. Persson and Daniel J. Close.

Since the 52-week low on April 12, yields have risen by an average of 46 basis points.

"Ultimately, the case for fixed income generally, and munis specifically, is much stronger today than it was a year ago," said Nick Vendetti, municipal bond fund portfolio manager with Allspring Global Investments.

Puerto Rico must take additional steps to be able to regain market access, they said.

For the week, triple-A muni yields rose between 11 and 29 basis points, according to MMD, while UST yields rose 11 to 32 basis points.

"Steep corrections occurring inside 10 years on the curve reflect an ongoing process to reduce a deep inversion," said Kim Olsan, senior vice president of municipal bond trading.

The Investment Company Institute reported investors pulled another $290 million out of municipal bond mutual funds in the week ending May 10.

The market is seeing a supportive environment for munis, said Nisha Patel, managing director of SMA Portfolio Management at Parametric.