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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.