Anderss Persson News Today

"It's good news/bad news for fixed-income markets," said Nuveen strategists Anders S. Persson and Daniel J. Close.

Outside of economic data, "a light forward calendar is driving strong demand in the secondary market and with new issues, with some deals being significantly oversubscribed," SWBC's Roberto Roffo said.

Munis are directionally trading with USTs but underperforming in days where USTs rally and outperforming in days where USTs sell-off, said Greg Gizzi, head of U.S. fixed income and head of municipal bonds at Macquarie Asset Management.

The banking sector crisis caused a flight-to-quality bid in USTs last week.

February municipal bond activity compared to last month is brisk yet more finicky in the face of an ongoing supply shortage, according to Jeff Lipton, head of municipal credit and market strategy and municipal capital markets at Oppenheimer & Co.

Outflows lessened, with the Investment Company Institute reporting investors pulled $3.157 billion from mutual funds in the week ending Jan. 4, after $3.402 billion of outflows the previous week.

Despite the volatility in equities and Treasuries, the backdrop for munis is very positive.

Triple-A yields fell five to eight basis points while UST saw yields fall up to nine out long, moving the 30-year UST below 4% for the first time since mid-October.

The market has seen outflows for 13 straight weeks, per Refinitiv Lipper, but Nuveen strategists Anders S. Persson and John V. Miller said "selling is due primarily to investors harvesting tax losses."

"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.