Municipal bonds hit a positive milestone Monday, with yields on some bonds retreating to levels not seen since the market began selling off sharply in November.
The Wall Street Journalreports yields for a benchmark of triple-A 10-year municipal bonds fell to 2.62% on Monday. Citing Thomson Reuters Municipal Market Data, the paper notes it’s their lowest level since Nov. 10, around the time the selloff began. Yields move opposite to price.
The rally in municipal bonds has been a welcome one for the $2.9 trillion market. As investor confidence in municipal bonds fell, mutual funds focusing on municipal bonds have seen 26 consecutive weeks of outflows totaling $35 billion, according to Lipper FMI, a unit of Thomson Reuters.
However, The Journal notes that as muni-bond indexes have been flat or higher for 24 consecutive trading days, back to April 12, net withdrawals declined to $95 million last week, according to Lipper, the smallest single-week outflow recorded in the past six months. At the same time, key derivatives indexes that track the cost of insuring municipal bonds have improved.