The "week's substantial primary market calendar of $10-plus billion will be a big test for where market demand stands," said Tom Kozlik, head of public policy and municipal strategy at HilltopSecurities Inc.
Outflows returned, with the Investment Company Institute reporting investors pulled $1.148 billion from mutual funds in the week ending Feb. 22, after $931 million of inflows the previous week.
The availability of higher yields has brought some investors into the market even though volume in the primary and secondary markets are on the thin side and the municipal market is a bit of a mixed bag right now.
The bond markets are witnessing a rare situation that could hinder spending on infrastructure projects around the country, said Amanda Hindlian, president of fixed income and data services at ICE.