Municipals have continued outperforming, "building on the trend that started in late May," Barclays strategists Mikhail Foux, Clare Pickering and Mayur Patel said.
"Investors' jitters in the lead up to next week's Fed meeting resulted in some large macro market moves and a rise in volatility," noted BofA Securities strategists in a weekly report.
For long-term muni bonds, BofA strategists noted that macro market and supply/demand conditions "are dominating the picture, pushing the high-grade muni market to a relatively rich valuation versus Treasuries."