Municipal bond traders were set for a second wave of new issuance to sweep over the market on Thursday. Riding the crest of the supply wave will be the North Texas Tollway Authority System's $750 million bond sale, buoyed by two recent rating upgrades.

Treasury prices were mostly lower on Thursday, with the yield on the two-year Treasury note slipping to 0.72% from 0.74% on Wednesday, while the 10-year yield rose to 2.20% from 2.19% and the 30-year yield increased to 2.98% from 2.95%.

The yield on the 10-year benchmark muni general obligation on Wednesday finished two basis points stronger at 2.22% from 2.20% on Tuesday, while the yield on the 30-year GO was three basis points stronger at 3.17% from 3.14%, according to the final read of Municipal Market Data's triple-A scale.

The 10-year muni to Treasury ratio was calculated on Wednesday at 101.9% versus 100.5% on Tuesday, while the 30-year muni to Treasury ratio stood at 107.8% compared to 105.7%, according to MMD.

MONEY MARKET INFLOWS

Tax-exempt money market funds experienced inflows of $2.23 billion, bringing total net assets to $248.92 billion in the period ended Sept. 7, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $810.7 million to $246.69 billion in the previous week.

The average, seven-day simple yield for the 377 weekly reporting tax-exempt funds remained at 0.01% for the 123rd straight week.

The total net assets of the 949 weekly reporting taxable money funds fell $13.42 billion to $2.427 trillion in the period ended Sept. 8, after experiencing an outflow of $28.53 billion to $2.440 trillion in the prior week.

The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 34th week in a row.

Overall, the combined total net assets of the 1,326 weekly reporting money funds decreased $11.19 billion to $2.675 trillion in the period ended Sept. 1, which followed an outflow of $29.34 billion to $2.687 trillion the week before.

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