Fixed income

Many market participants may be on vacation, but there's still interest in municipal bond mutual funds. Flows to muni bond funds rose on the week, keeping their hot streak alive.

The tax-exempt market ended flat to slightly stronger Wednesday continuing a week-long trend of muni yields following Treasury yields lower.

For the week ended August 22, investors pulled an estimated $4.48 billion from U.S. mutual funds, substantially more than the $2.72 billion they withdrew the week before.

The tax-exempt market posted a sixth consecutive trading session of gains on Tuesday as demand has outweighed supply in the muni market this week, and prices are following Treasuries higher.

Fixed income ETPs now account for 18% of global ETP assets, up from 7% in 2007 at the onset of the financial crisis, according to BlackRock. Bond ETPs garnered a 35% share of industry flows in the first seven months of 2012, according to a BlackRock report on the fixed income ETP landscape. …

The tax-exempt market ended firmer for the third session on Friday as demand outweighed supply and prices followed Treasuries higher.

Municipal bond mutual funds saw inflows fall by more than half the previous week's amount, dropping for the second straight week. But they've thus far remained positive through the summer lull at $436 million for the week ended Aug. 22.

For roughly 40 years, the SEC has clashed in a "regulatory tug-of-war" with Congress over regulation of borrowers of conduit bonds, which historically have higher default rates than traditional munis, said Paul Maco, a lawyer at Bracewell & Giuliani LLP.

The tax-exempt market ended on a steady tone Monday as market participant waited for primary issuance to provide direction.

The tax-exempt market ended on a steady tone Friday after weakening during every other trading session.

Moody's Investors Service downgraded 290 municipal issuers from April 1 through June 30, the most for any quarter since 2000, led by cities and school districts still recovering from the longest recession since the 1930s.

The tax-exempt market ended the day mostly unchanged as market participants said August vacations have slowed trading.

A key government witness against three former UBS AG municipal-bond executives in a bid-rigging trial called one of the defendants an "idiot" and was asked today whether he disliked him so much that he put photos of tortured cats on his desk.

The municipal bond market appeared to take a vacation day on Monday as trading activity was very slow. Traders are waiting for primary issuance to hit later in the week to provide direction.

The municipal market, sliding leisurely through its slow season, anticipates a slight uptick in issuance the week of Aug. 6. Industry estimates hold that muni bonds expected to be sold during the week should total $6.35 billion, versus a revised $5.93 billion last week. Then, the market waded through a sluggish week in the primary and secondary that did little to yields, which continue to hover near record lows.

The tax-exempt market turned to the primary market for direction Tuesday as traders looked to see how this week's balance of supply and demand would play out. Munis ended flat for the day after two sessions of losses.

Puerto Rico's debt load, exceeding $60 billion, and pension liabilities are a challenge to the island's fiscal ability and investors should limit their exposure, cautions Alan Schankel of Janney Capital Markets.

The tide of investor demand stays high for municipal bond mutual funds. A strong week of record-low muni bond yields on the intermediate and long ends of the curve marked the week ended July 25.investor-demands-keeps-muni-fund-flows-high

The municipal bond market continues to strengthen as positive supply and demand factors this week push tax-exempts higher.

The tax-exempt market continued its rally Tuesday as positive supply and demand factors, as well as weaker stock markets due to European worries, buoyed safe haven assets.