Investor demand for munis picked up steam this week, following a brief Independence Day week of relative inactivity. And the market continued to show its confidence in municipal bond mutual funds with strong inflows.

Muni bond funds saw $653 million of inflows from funds that report their flows weekly for the week ended July 11, according to Lipper FMI. They have seen inflows for 13 consecutive weeks.

Inflow numbers more than doubled from those of the previous week. There were net inflows of $317 million the week ended July 4. The muni market has now seen positive flows for 42 of the past 45 weeks.

The long end of the muni bond yield curve has seen the largest gains. Since last Friday, tax-exempt yields have plummeted on the long end, and fallen appreciably in the 10-year sector of the curve. As has been the case all summer, investors are flush with Hefty bags of cash, and are rather itching to put it to work, regardless of the almost-prohibitively low yields.

Muni yields since last Friday outperformed those of Treasuries. Muni ratios to Treasuries, though, remained in cheaper territory. Ratios in the two, 10- and 30-year marks each held at levels greater than 115%.

This past week, assets for all muni funds that report their flows weekly jumped to $303.3 billion from $301.8 billion the previous week.

The value of the holdings for weekly reporting funds rose by $1.31 billion. The week before, they increased by $774 million.

The four-week moving average for all municipal bond mutual funds that report their flows weekly saw a $538 million inflow, rising from a $466 million gain the week before.

Long-term bond funds saw inflows as well. They represented just under half of the overall figure for muni bond funds.

Long-term bond funds that report their flows weekly saw inflows to the tune of $323 million, a large increase from $127 million the week before.

Inflows to high-yield muni funds remained solidly positive. They have seen inflows for 16 consecutive weeks, and 30 of the previous 31 weeks.

High-yield funds that report weekly saw $173 million in inflows, Lipper said. The previous week, they reported $143 million in inflows.

Assets for high-yield funds that report their flows weekly increased to $41.57 billion, up from $41.44 billion the previous week.

The value of the holdings for weekly reporting funds rose by $252 million. Last week, they increased by $168 million.

The four-week moving average for all high-yield muni bond funds that report their flows weekly was nearly $169 million of inflows, up narrowly from a $167 million the week before.