Fixed income

The money market fund industry fell victim to seasonal outflows as significant withdrawals by individuals and corporations signaled the arrival of the filing deadline for federal income tax season in the week ended April 15, according to The Money Fund Report.

Volume numbers in the municipal bond market have shifted so far in 2013 to reflect a stronger start in new money issuance from recent years.

BlackRock suggests scaling back on lower-rated municipal debt even as the bonds rally the most in almost five years.

Securities and Exchange Commission commissioners and panelists at a roundtable Tuesday wrestled with how to improve the transparency of municipal bond trading and prices, particularly for retail investors.

FINRA fined Merrill $1.05 million and ordered the firm to pay more than $323,000 in restitution for over 12,000 trades executed on its ML BondMarket platform.

The Financial Industry Regulatory Authority fined a firm $37,500 for trade and books and records violations, and a broker $5,000, giving him a four-month suspension, for telling a customer he redeemed bonds rather than sold them without the customer's permission.

Revenue from trading bonds declined 3% to $4.6 billion, excluding adjustments, from the same period last year, Citigroup said. David Trone, an analyst with JMP Securities LLC, had estimated $3.2 billion. Moshe Orenbuch, a Credit Suisse Group AG analyst, predicted $4.2 billion.

Inflows of $57.1 million entered the tax-exempt money market industry in the week ended April 8 and total net assets inched up to $273.12 billion, according to The Money Fund Report, a service of iMoneyNet.com.

Great rotation or not, more money hemorrhaged from municipal bond mutual funds as outflows occurred for the sixth straight week, at $631 million.

Bill Gross raised the holdings of Treasuries held in his $289 billion flagship fund at Pacific Investment Management Co. to 33 percent of assets last month, the highest level since July.

Pimco’s 0-5 Year High Yield Corporate Bond ETF reported $204.1 million of inflows on April 8, the same day the SPDR Barclays High Yield Bond ETF recorded its second-biggest daily redemption since its inception more than five years ago, equal to about $378 million worth of shares, Bloomberg reports.

State credit spreads have compressed across the curve over the last few years as investors move down in credit quality to pick up extra yield. With lower rated credits compressing and now trading on top of higher rated credits, many market participants think now is the time to exit those trades before spreads start widening.

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.

Tax-exempt money market funds reversed a recent spate of outflows -- yet gained just a scant $24.2 million -- as total net assets barely inched up to $276.65 billion in the week ended March 18, according to The Money Fund Report, a service of iMoneyNet.com.

Investors were down on the municipal bond market for a third straight week as $261 million poured out of weekly reporting muni bond mutual funds for the week of March 20.

Mutual funds, especially of the equity variety, enjoyed the affections of investors in February, celebrating net inflows for the month.

Municipal bond mutual funds saw outflows for a second straight week, at $133 million, as the market absorbed a large calendar with concessions.

As the Securities and Exchange Commission's enforcement and litigation activity in 2012 demonstrates, the agency's focus on municipal market enforcement has increased dramatically, and this trend seems likely to continue under the SEC's new leadership.

At the outset, the U.S. Supreme Court's latest ruling against the Securities and Exchange Commission-that there is a five-year limit on bringing fraud claims- may sound like a victory for mutual funds and their advisors.

A Massachusetts Democrat has introduced a bill that would permanently extend Build America Bonds with a subsidy rate that drops on a phased-in basis and a provision that ensures sequestration would not result in reduced Treasury subsidy payments to issuers.