Secondary bond market

Triple-A yields continue to rise, with the two-year muni just below 2%, the five well above and the 10-year approaching 2.5%.

Supply for the holiday-shortened week is $4.8 billion. Municipals performed the worst since 1980 in the first quarter of 2022, but some analysts see the pain subsiding.

Investors pulled more from municipal bond mutual funds in the latest week, with Refinitiv Lipper reporting $3.247 billion of outflows, of that $1 billion was high-yield. ETFs are still seeing inflows.

Investors pulled more from municipal bond mutual funds as the Investment Company Institute reported $4.5 billion of outflows in the week ending March 30.

Hawkish Fed comments caused UST yields to rise by as much as 17 basis points, just as munis had caught a bid. The new-issue market fared well in digesting large deals amid the volatility.

Municipals have taken a hit in the first months of 2022, but higher yield levels and cheaper ratios have offered possibilities for both retail and institutional buyers, analysts say.

Next week's supply is slated to be $10.166 billion, $8.982 billion of negotiated deals and $1.184 billion of competitive loans. A larger primary calendar is led by two billion-dollar airport deals.

Investors pulled more from municipal bond mutual funds in the latest week, with Refinitiv Lipper reporting $2.038 billion of outflows, up from $1.503 billion of outflows in the previous week.

The Investment Company Institute on Wednesday reported $2.728 billion of outflows in the week ending March 23, down from $3.615 billion of outflows in the previous week.

Without a reversal in UST or municipal bond mutual fund outflows, munis will continue to be pressured.