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After remaining unchanged for much of June, Municipals rallied in July, with yields falling to new record lows across most of the curve. Munis outperformed Treasuries and Corporates and the Muni to Treasury ratio, a common valuation metric that has been essentially meaningless since the market dislocation in March, has returned to more normal levels. Muni Mutual Fund inflows have continued for 11 consecutive weeks and cash from coupon and maturity payments led to strong demand, as we have expected. While rates are at historic lows, the curve remains steep, which offers an opportunity in the longer end of the curve. We continue to recommend higher quality, stable sectors and credits, especially if taking added duration risk.