Secondary bond market

The municipal market is poised to absorb the late-year burst of supply as market technicals are expected to remain positive through year end.

The weaker-than-expected employment report sent U.S. Treasury yields lower and equities sold off. Munis did what they've been doing — mostly ignored it.

Refinitiv Lipper reported a significant drop in municipal bond mutual fund inflows at $36 million in the latest week, a signal the volatility of other markets may be creeping in. High-yield saw $53 million of inflows.

The Investment Company Institute reported $974 million of inflows into municipal bond mutual funds in the week ending Nov. 23, down from $1.430 billion in the previous week.

Powell says the FOMC will consider ramping up tapering when more information about Omicron and its impacts are known, further flattening the UST yield curve.

Economists appear to be less concerned about Omicron, with some saying that even if the variant causes another pandemic wave, it is more likely to "slow rather than interrupt" the global economic recovery.

Municipal yields fell as much as three basis points on Friday as Treasuries soared in a flight-to quality bid as stocks plunged on fears about the emergence of a new COVID variant.

ICI reported $1.43 billion of inflows into municipal bond mutual funds in the week ending Nov. 17, down from $1.61 billion in the previous week.

With the leadership questions mostly answered, the Fed must figure out what to do about inflation. The markets expect the Fed will have to raise rates sooner than planned, and perhaps speed up taper to do so.

This week will be all about the secondary market given that the majority of issuance was priced earlier in the month while Dec. 1 coupon payments should make secondary offerings look attractive.

The Thanksgiving holiday-shortened week, next-to-no supply and few economic data releases should keep munis steady.

Month over month, the municipal market is in a much better position, as heavy demand and flows continue to drive it.

The Investment Company Institute reported $1.608 billion of inflows into municipal bond mutual funds for the week ending Nov. 10, up from $657 million a week prior.

A large new-issue calendar began pricing in the negotiated and competitive markets, with a few deals bumped off the day-to-day calendar.

Outside influence "beyond the control of the muni bond market" is needed to derail the recent positive momentum.

Investors put nearly $2 billion into municipal bond mutual funds for the most recent week with high-yield reversing a downward course to hit $1.2 billion following just $1 million a week prior.

The Investment Company Institute reported $657 million of inflows into municipal bond mutual funds while ETFs saw $828 million of inflows, a massive increase over the $43 million reported a week prior.

Triple-A benchmarks have fallen double digits since Nov. 1, with the largest moves out long. California, the District of Columbia, Wisconsin and other issuers part of a $6 billion new-issue calendar priced.

Municipals were quiet on Monday following Friday's rally and ahead of the $9.6 billion estimated to be priced early in the week before the Veterans Day holiday close Thursday. Connecticut priced for retail.

The long end of the municipal curve rallied under a backdrop of stronger-than-expected October jobs data and upward revesions to the prior two months ahead of the arrival of $9.6 billion next week.