Secondary bond market

Tighter spreads and richer ratios are likely to continue, particularly as looming tax increases amplify the value of the tax-exemption, but analysts are hesitant to predict how much lower rates can go before investors balk.

A disappointing jobs report gives credence to the Federal Reserve’s concern about slack in the labor market.

Refinitiv Lipper reported $584 million of inflows, $341 million of which went to high-yield, as investors pull back on reinvesting to pay tax bills with the May 17 tax filing deadline looming.

Pennsylvania's competitive GO deal saw its yields fall further from recent trading while the North Texas Tollway Authority benefited from positive credit news on the transportation sector and repriced 25 basis points lower. ICI reported another round of $2-billion-plus inflows.

After just one session, the 10-year muni is back below 1% with ICE Data Services and Refinitiv MMD at 0.99% while Bloomberg BVAL is at 0.96% and IHS Markit at 0.95%.

Inflationary pressures remain high while the manufacturing sector continues to deal with supply chain woes that hold it back, analysts said.

Rates, ratios and credit spreads have munis entering May on solid footing, though some pressures due to tax season and rising U.S. Treasuries remain.

Refinitiv Lipper reported another week of inflows at $1.64 billion, with $630 million headed into to high-yield. Benchmark yields rose as much as four basis points following weaker U.S. Treasuries, resistance to ultra-low yields.

The municipal market largely ignored the FOMC news that it would hold rates steady. New Jersey was 20 times oversubscribed and ICI reported $2.5 billion of inflows into long-term municipal bond mutual funds.

Data released Tuesday show an improving economy, which continues to stoke fears of impending inflation. Muni investors await New Jersey's $1.57 billion transportation deal.