Securitization

Refinitiv Lipper reported just over $1 billion of inflows into municipal bond mutual funds, an $800 million drop from a week prior, moving the four week moving average to $1.6 billion.

ICI reported $1.99 billion of inflows into municipal bond mutual funds, bringing the total to $69 billion for 2021.

Daily bid-wanteds totals per Bloomberg have fallen to an average par value below $450 million from $640 million per day during the first quarter and $549 million in the second.

Cooper Howard, director of fixed income strategy at the Schwab Center for Financial Research, talks with Chip Barnett about what municipal bond investors can expect in the second half of the year – low yields and strong fundamentals. He looks at continuing bond fund inflows, rising taxable issuance and compressed spreads. (14 minutes/Taped Aug. 3).

Returns of negative 0.40% would be the third-worst August performance of the past 10 years, according to Bloomberg data.

Experts agreed that Federal Reserve Board Chair Jerome Powell acknowledged the Fed could start tapering this year and that it would have no implications for liftoff, but not everyone was satisfied with what they heard.

Trades on alternative trading system platforms are smaller and more likely to involve securities with complex features, according to a new MSRB report.

Refinitiv Lipper reported $1.9 billion of inflows, high-yield gaining $524 million, the 25th consecutive week of inflows into municipal bond mutual funds.

The Investment Company Institute reported $2.3 billion of inflows, bringing 2021 totals to $67 billion.

While municipals were little changed, broader markets remain focused on Jackson Hole and speculating what will be said about tapering.

John Ceffalio, Senior Municipal Research Analyst at CreditSights, talks with Chip Barnett about what to expect in the second half of the year. He discusses municipal bond market fundamentals, credit and climate disclosure. And he looks at the pandemic’s long-term risks for U.S. cities as the work-from-home culture becomes stronger and how higher education will cope with a new reality. (18 minutes)

U.S. Treasuries gave little direction Monday, holding ratios and yields steady, leading most participants to argue both are satisfactory to ride out the summer.

Municipal bonds ended the week unchanged for the sixth consecutive trading session as inflows surged as more than $7 billion is headed to market next week.

Municipals were unchanged for the fourth consecutive day this week amid slight Treasury strength as demand for yield continued.

Demand was brisk in the primary market while the short-term market traded sideways on the pressure from the heavy new issue calendar, the release of the FOMC minutes and Treasury auction.

The Puerto Rico Aqueduct and Sewer Authority sold $813 million of senior lien revenue bonds consisting of tax-exempt refunding, taxable refunding and forward delivery refunding bonds.

As New York City launched the first of its two-day retail order period on $1.039 billion of GO bonds, the market was uneventful ahead of $9.76 billion in the primary market this week

The short end of the muni market saw trading of larger blocks at or below benchmarks but yield curves were little changed on a summer Friday.

Refinitiv Lipper reported $1.87 billion inflows. A solid demand component for the market, but some suggest the move into bonds from equities is more an asset reallocation than investors keen on fixed income.

Another $2 billion-plus was reported flowing into municipal bond mutual funds in the latest week, continuing to be a supportive demand component for munis.