Munis little changed, anticipating Warsh taking over Fed chair

Munis were little changed on Thursday, as U.S. Treasuries ended mixed and equities closed higher.

Muni yields were mostly steady, with muni yields changed only up to two basis points. UST yields cheapened by up to two basis points, with bigger losses at the short end of the curve; but out long, yields richened by up to three basis points.

The market has seen a trend lately of "happy endings to each week, disappointing Mondays," according to James Pruskowski, managing director at Hennion & Walsh.

"Risk-free rates are rallying off the local highs on rumors of an imminent deal," Pruskowski said, but "the market's taking it with a grain of salt." Investors have built up a lot of anticipation for Federal Reserve Chair nominee Kevin Warsh's assuming the post, Pruskowski added, worrying that his first move will be a "jawbone" to the market.

Fund flows
Investors added $1.522 billion into municipal bond mutual funds in the week ended Wednesday, following $1.349 billion of inflows the prior week, according to LSEG Lipper data. This is the fourth time in the last five weeks that inflows topped $1 billion.

High-yield funds saw inflows of $1.4 million compared to inflows of $218.3 million the previous week.

Tax-exempt municipal money market funds saw inflows of $493.2 million for the week ending May 18, bringing total assets to $151.163 billion, according to the Money Fund Report, a weekly publication of EPFR.

The average seven-day simple yield for all tax-free and municipal money-market funds was 1.93%.

Taxable money-fund assets saw $4.183 billion added, bringing the total to $7.607 trillion.

The average seven-day simple yield was 3.31%.

The SIFMA Swap Index was at 1.64% on Wednesday compared to the previous week's 2.38%.

New-issue market
In the primary market Thursday, BofA Securities priced for Cuyahoga County, Ohio, (Aa2/AA//), $929.22 million of capital facilities bonds, with 5s of 12/2027 at 2.75%, 5s of 2031 at 3.00%, 5s of 2036 at 3.46%, 5s of 2041 at 3.82%, 5s of 2046 at 4.30%, 5s of 2051 at 4.66%, 5.25s of 2056 at 4.66%, 5.5s of 2061 at 4.85% and 5s of 2064 at 5.03%, callable 6/2036.