Secondary bond market

The Investment Company Institute on Wednesday reported $2.533 billion of inflows into municipal bond mutual funds, the highest since February.

If the market holds, the state could also receive the lowest recorded true interest cost in its history of general obligation bond sales.

Tuesday’s data may not be indicative of where the economy is going and will likely be written off by the Federal Open Market Committee at its meeting, analysts say.

Most analysts expect the Federal Open Market Committee will alter its Summary of Economic Projections and perhaps begin to talk about tapering, without offering clues when they'll begin cutting back on asset purchases.

Yields on top-quality munis were flat on the AAA scales Friday; yields were seven to nine basis points lower on the week.

Trading showed firmer prints, with Georgia general obligation bonds, Maryland GOs and Los Angeles Department of Water and Power bonds trading up.

The Investment Company Institute reported $1.089 billion of inflows into municipal bond mutual funds, marking the 13th consecutive week.

The U.S. Treasury 10-year dipped to its lowest yield since March while municipal investors poured money into new deals and secondary trading helped push benchmarks even lower.

The market idled Monday while investors prepare for a $12 billion new-issue onslaught that brings diversity of credits that will help direct benchmark yields. Continued fund flows are needed to sustain current yields.

Muni prices were firm Friday after the employment report showed nonfarm payrolls rose 559,000 in May as the jobless rate fell to 5.8%.