Secondary bond market

As most participants await Friday's jobs report, the municipal market Thursday sustained a firm tone as rates remained on a gradual path of decline.

ICI's report marks the 12th consecutive week of inflows bringing the total for 2021 to more than $40 billion. Lower- and non-rated deals saw 20 to 30 basis point bumps in repricings as any paper with yield is massively oversubscribed.

The revenue sector winners in May included healthcare with +0.53% gains, transportation with +0.42%, each benefiting from "the reach for yield and improving metrics," analysts said.

Sheila King of Eagle Asset Management talks with Chip Barnett on the growing importance of environmental, social and governance issues for municipal governments. She gives examples of what works and what doesn't and why it matters. (14 minutes)

Municipal yields will likely stay in a narrow range with trading activity subdued unless larger interest rate volatility unexpectedly sets in, analysts say.

The fundamentals of the muni market have investors stuck in a low-rate environment without much of an alternative. Refinitiv Lipper reported $1.466 billion of inflows into municipal bond mutual funds with $813.8 million into high-yield.

A reported preliminary 25.8% drop in May issuance shows how strong fund inflows, improving credit and the reopening of governments are keeping the muni market issuer friendly.

Triple-A municipal benchmark yield curves were bumped one to two basis points, lagging a four basis point rally in U.S. Treasuries after weaker consumer sentiment and dovish comments from Fed officials moved equities lower.

Municipals saw little activity on Monday as the market prepped for the bulk of the week's $7B primary calendar arriving Tuesday and Wednesday.

Strong technicals have been the theme, and with federal aid and better-than-expected tax receipts coming in, issuers are not tapping the market as much as investors would hope.