Securitization

Even if there was some hesitation in the past few sessions to accept lower municipal yields given rich valuations, municipals continue grinding lower. One- and two-year AAA yields hit record lows of 0.06% and 0.08%, respectively.

Why has inflation remained low and how will the economic recovery impact it? Several experts offer their views as to whether inflation is or will be a problem.

The January employment report headline number disappointed while stimulus news lifted equities and U.S. Treasuries rose on both counts. Municipals ignored those moves ahead of another week of less-than-ample supply.

No rate hikes in sight as employment continues to struggle and inflation should rise this year, but not enough to force the Fed to raise rates.

Lumesis' president, COO and co-founder Tim Stevens talks about how AI complements the company’s pricing and scales software to predict the shape of a deal-specific municipal yield curve based on the structural and credit-characteristics and to use that predicted shape to fill-in portions of a yield curve that cannot be built from traditional means. Lynne Funk hosts. (35 minutes).

ICI reports a third week of $3-plus billion of inflows. Couponing is becoming as much a factor in inquiry as credit and issuers move to lower coupons in both competitive and negotiated deals.

Dealers say increased focus on systemic pennying has decreased its activity, while others aren't so sure.

Rich ratios focus buyers' eyes on a primary market that simply doesn't have enough supply to keep up with demand.

High-yield continues to be sought after as high-grade paper is yielding about 0.70% in 10 years and 1.40% or lower in 30 years and credit spreads continue to tighten in nearly every sector. Ratios are near 20-year record lows.

It is most certainly an issuers' market as rates are low, credit spreads continue to tighten, money pours into municipal bond mutual funds at record levels and a net negative supply of more than $11 billion.

Chicago Board of Education bonds were repriced to lower yields by as much as 37 basis points, showing just how far investors will go for any incremental yield.

Fed chair says it's unlikely there will be "troubling inflation" any time soon, and rates will stay low and asset purchases will continue at current levels. ICI reports another $3.24 billion of inflows as munis follow UST to lower yields.

New issues priced with ease with high-grade issuers tight to triple-A benchmarks. It was the first time the municipal yield curve saw such noticeable movement, following little changed secondary activity for nearly the past two weeks.

Returns of all the investment grade options "pale in comparison to those for municipal high-yield," which should bolster Texas gas and Chicago public schools deals.

The $187 million deal is the largest yet to be hosted on the Clarity platform, which is approaching the half billion mark of resets every week.

A 'perpetual calm' continues to fall over the municipal market as inflows into municipal funds, combined with the shortage of traditional tax-exempt supply, is directing most aspects of daily market activity.

Refinitiv Lipper reports another multi-billion week of inflows, the domino effect from such strong flows is that secondary selling doesn’t need to be so active, creating fewer opportunities for new inquiry, analysts say.

Robin Marshall, director of fixed income research at FTSE Russell, talks about what investors should be paying attention to during the coming year. He looks at inflation prospects, possible Central Bank actions and the continuing effects of the COVID-19 pandemic. Chip Barnett hosts. (15 minutes)

Muni yields have been in a nine-basis point range since the beginning of the year while UST yields have fluctuated more than 20 basis points. With so little supply, muni credit spreads continue to compress.

Tax-exempt performance is dependent on what supply looks like versus taxables. The 30-day visible supply shows more than 30% taxables on tap, though some analysts say the taxable increase makes exempts more attractive.