Market volatility has risen significantly, particularly in the last several weeks, with daily Treasury yield swings of 10 basis points or more becoming the norm with municipals struggling to stabilize.
Refinitiv Lipper reported the first inflows into municipal bond mutual funds at $216 million after three weeks of large outflows while high-yield saw small outflows. Exchange-traded funds reported $755 million of inflows.
Municipal to UST ratios hit highs earlier in the week, creating entry points for buyers to return to the market even as ratios fell on the week. The primary will see a smaller calendar at $5.4 billion.
Buyers appeared to return to the market the past two sessions after the January correction moved yields and ratios higher. Secondary trading was up again on Wednesday and new deals were well-received.