Fixed income

If municipal bond market observers feel there are other time bombs out there waiting to detonate that resemble the accusations surrounding the manipulation of Libor, they won't be found in variable-rate debt tied to the SIFMA municipal swap index.

Phillip D. Murphy, a former manager of municipal derivatives products at Banc of America Securities LLC, now Bank of America Merrill Lynch, was indicted by a federal grand jury on three counts of conspiracy and wire fraud in connection with a fraudulent scheme to rig bids for municipal-bond related investment agreements.

Tax-exempt money market funds lost $2.03 billion -- nearly half of the unusually high bounty they amassed last week – as total net assets dipped to $272.67 billion in the week ended July 16, according to The Money Fund Report, a service of iMoneyNet.com.

Municipal bond mutual funds continue to see strong and growing demand from investors. Even though, the week was marked by modest moves in prices throughout most of the yield curve, money poured into bond funds for the week ended July 18.

The municipal bond market continued its rally Monday, despite limited new issuance in the primary market. Strong demand has once again pushed the 30-year yield to a new record low.

The market continued to show its confidence in municipal bond mutual funds with strong inflows following a holiday week of relative inactivity.

Charles Schwab Investment Management, Inc. has launched the Laudus Mondrian Global Fixed Income Fund (LMGDX) to bet on developed, U.S., and emerging market bond markets.

The municipal bond market rallied Tuesday as new issuance found willing investors and tax-exempt yields outperformed those of Treasuries.

A tightening of municipal bond yields in various pockets of the secondary market highlighted an otherwise quiet trading session Monday.

The holiday week slowed the tax-exempt market down to a crawl, but investors still invested in municipal bond mutual funds. Those funds that report their flows weekly saw $317 million of inflows for the week ended July 4.

In the first six months of 2012 the bank handled 242 issues and $26.1 billion in par value, giving it a 13.6% share of the new issue municipal bond market by par value.

An uninspiring week of frozen yields in the municipal bond market could not put a stop to the inflows pouring into muni bond mutual funds. Muni bond funds saw $625 million of inflows from funds that report their flows weekly for the week ended June 27, compared with net inflows of $555 million the week ended June 20.

Investors pulled an estimated $1.85 billion from U.S. equity funds the week ended June 20, almost three times the $620 million withdrawn a week earlier.

New Rule G-43 requires that broker's brokers make reasonable efforts to obtain fair and reasonable prices when conducting secondary-market "bid-wanted" auctions.

Muni bond indexes were mixed on the week as the need to put truckloads of reinvestment money to work pushed investors to buy munis even while yields sat at barrel-scraping levels

Jim Swanson, chief investment strategist at MFS Investment Management, shared his views on the muni market in 2012's second half, legislative issues affecting the market, overall volume and his prognosis on mutual fund flows and performance.

Municipal bond mutual funds continued their hot streak. As the market saw modest firming on the week, muni bond funds saw inflows for a ninth consecutive week.

Royal Bank of Canada hired Gregory Steele to trade high-yield bonds in the United States.

The tax-exempt market struggled throughout the week under the weight of heavy new issuance as yields jumped double digits.

The hunt is on for yield in the municipal market as interest rates continue to hover around historical lows, forcing investors to use varying strategies to boost returns.