Securitization

Friday’s data showed economic weakness. Consumers, the drivers of the economy, pulled back during the holiday season and have exhibited weakening sentiment.

Powell, speaking on a livestreamed event, said interest rates will be raised "no time soon" and there will be plenty of notice "well in advance of active consideration."

Municipal bonds continue to ignore UST and ICI reports $2.67 billion of inflows. While CPI should stay soft through the first quarter, expectations for future inflation should be considered.

Muni to U.S. Treasury ratios hover near the lowest point in a decade and analysts see little impetus for munis to catch up in the near term.

Municipals were little changed Monday as participants await the larger new-issue calendar while equities and U.S. Treasuries react to news out of Washington and COVID-19 ravages the globe.

The employment report showed 140,000 decline in nonfarm payrolls in December, but economists found some positives in the numbers.

It was inevitable that muni yields would need to rise somewhat as the UST 10-year broke above 1%, however participants said the supply/demand imbalance will keep munis from rising as quickly as Treasuries. More than $1 billion inflows reported.

John Hallacy, founder of John Hallacy Consulting LLC, talks about the most important opportunities and challenges the municipal bond market will face in 2021. He gives his estimate on where muni volume may be headed, discusses the possibility of a federal infrastructure program and talks about what to expect under a Biden Administration. Chip Barnett hosts. (Recorded Dec. 22; 22 minutes)

FOMC members backed maintaining asset purchases, although “a couple” were “open” to “weighting purchases of Treasury securities toward longer maturities,” according to minutes released Wednesday.

Without the benefit of a larger new-issue calendar, secondary trading is likely to continue the theme of the final two months of 2020: more bidders than bonds.

From the Centennials to the COVID generation, the municipal market's demographics will change dramatically in the next decade as will the way investors view investing in munis.

Federal Reserve Bank of Chicago President Charles Evans says monetary policy will need to remain “accommodative for quite a while,” since inflation won’t hit a 2% average for “a long time.”

The new-issue calendar builds from almost nothing to $2.4 billion in the first week of the New Year, with deals ranging from education to taxables to social bonds on tap for investors.

Dominick D'Eramo, head of fixed income at Wilmington Trust Investment Advisors, talks with Chip Barnett about how the municipal bond market did in 2020 and what may be on tap for munis in the new year. (12 minutes)

Municipal bond funds saw $2.086 billion of inflows in the week ended Dec. 22, the Investment Company Institute reported Wednesday after a $2.517 billion inflow the week prior.

While there are no major sales on the calendar for this week, some larger deals from and Texas, California, New Jersey and Colorado issuers are on tap for the first few weeks of 2021.

Refinitiv Lipper reported tax-exempt mutual funds saw $1.288 billion of inflows in the week ended Dec. 23, the seventh week in a row investors put cash into the funds.

IHS Ipreo estimates the week's bond volume at $7.3 million in a calendar composed only of small negotiated deals.

The muni market headed into holiday hibernation on the last full trading day of the week.

Taxable munis have posted the highest returns among all fixed-income indexes this year, BofA said.