Fixed Income Daily. Aug, 18

A regular element of our Thursday comments for 45 weeks now is reporting positive flows to municipal mutual funds. The theme continues this morning.

Fast Fix:
-Small rates rally on Wednesday, despite odds of a fed rate hike rising to about 50/50 by December;
-July FOMC minutes pointed to greater division on committee about optimal 2016 policy path;
-High yield continues to trade well, aided by the reach for yield in nearly all fixed income markets;
-Inflows to muni mutual funds, positive for 45 weeks, are still lending a firm tone to tax-exempts.