"Municipal market performance has improved, but the bumpy road continues as investors remain uncertain about the interest rate environment," said Nuveen's Head of Municipals John Miller.
Munis open October firmer, underperforming a UST rally, but September closed out the month with 3.84% losses the single largest monthly loss since September 2008.
Outflows from municipal bond mutual funds increased as investors pulled $3.416 billion out of funds in the latest week, versus the $1.180 billion of outflows the prior week, according to Refinitiv Lipper data.
Munis again outperformed U.S. Treasuries. Participants note that municipal to Treasury ratios and nominal yield levels are “extremely attractive,” which is generating some renewed interest among the retail crowd.