Muni bond mutual fund flows, which are viewed by many as a proxy for demand, recorded outflows for the week ending April 3, Lipper FMI numbers showed.
Funds that report their flows weekly saw hemorrhaging, at $278 million, for a fifth consecutive week. For the week of March 27, the market saw outflows of just $43 million.
Traders reported decent reception for new issuance, including larger general obligation bond deals from Illinois and Pennsylvania. The secondary market quietly took a back seat to the primary, until Thursday.
Tax-exempt yields fell beyond the front end of the curve, Municipal Market Data numbers showed. The 10-year, triple-A yield dropped nine basis points on the holiday-shortened week from last Thursday to 1.80%.
The 30-year yield fell six basis points to 3.03% over the same period. The two-year yield, practically encased in amber, held at 0.31% for a 32nd straight session.
Treasury yields performed similarly, if slightly better farther out along the curve. Subsequently, muni ratios to Treasuries beyond the front end of the curve moved little over the span, hovering at 101% and 102%, respectively, for the 10-year and the 30-year. The two year ratio rose five percentage points to almost 135%.
Assets for all muni funds that report their flows weekly increased for a third consecutive week to $326.8 billion. The week prior, they reported $326.1 billion.
The value of the holdings for weekly reporting funds rose by $869 million. The week before, they rose by $260 million.
The four-week moving average for all municipal bond mutual funds that report their flows weekly was $174 million of outflows, falling from $128 million in outflows the week before.
Long-term bond funds that report their flows weekly continued to see heavy outflows at $205 million. That represented an increase from the $114 million of outflows they reported the week before.
High-yield muni funds are back to reporting outflows, after one week of inflows. For most of 2012 and 2013, flows were and have been positive.
High-yield funds that report weekly saw $41 million in outflows, Lipper said. The previous week, they reported $17 million in inflows.
Assets for high-yield funds that report their flows weekly rose to $45.35 billion, after falling the three previous weeks. Theyre up from $45.22 billion reported the week before.
The value of the holdings for weekly reporting high-yield funds rose by $171 million. Last week, they increased by $81 million.
The four-week moving average for all high-yield municipal bond funds that report their flows weekly showed $36 million of outflows, falling from $26 million of outflows the week before.