Munis are steady as USTs richen
Munis were little changed on Thursday, as U.S. Treasuries richened.
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Muni yields changed by up to two basis points. UST yields richened by two to seven basis points, with the greatest gains on the long end, at a 3:30 p.m. read.
The muni market is still working through the aftermath of a difficult period, said Tripp Kaiser, executive director of the Center on Municipal Capital Markets at the University of Texas at Austin. The market appears to be starting to recover.
“Higher yields and ratios do eventually draw interest, ease distribution and provide for better total return prospects,” Kaiser said. “That process appears to be (at least a little) underway, but the market likely needs some more time to heal: for volatility to subside, for participants to better understand clearing levels and for momentum to definitively turn.”
Fund flows
Investors added $1.06 billion to municipal bond mutual funds in the week ended Wednesday, following $543.6 million of outflows the prior week, according to LSEG Lipper data.
High-yield funds saw outflows of $163.8 million compared to outflows of $368.6 million the previous week.
