Municipal performance has been quite good. Long dated munis are up 5.25% since the beginning of the year mostly in reaction to very positive supply technicals.

New issue supply is a little more than half of what it was for the same period last year! To put things in perspective, approximately 70 billion worth of reinvestment proceeds were created in the first quarter from maturing bonds and paid coupons versus less than 50 billion issued.

April has historically been a time when new issue supply increases and demand subsides. Tax time is a period when retail buyers have less cash to invest in new municipals and it is a time when there are relatively fewer maturing bonds and paid coupons.

Muni performance will likely pause in April.