Most of The Bond Buyer’s weekly yield indexes declined this week as municipals mainly showed gains in the sessions following the three-day holiday weekend.
“It’s been a pretty good week in muniland,” said Evan Rourke, portfolio manager at Eaton Vance. “Munis have rallied. The market has had a nice tone to it. You’ve had some July 1 money being put to work, you haven’t had that large of a calendar, and you’ve had a rally in the Treasury market, which has helped boost munis.
“There’s been kind of a queasy stock market, too, and all those things help out with the muni side. That’s really what’s driving our market right now. It has a good tone, and it’s likely to continue.”
The municipal market was unchanged with a slightly firmer tone last Thursday, ahead of the July 4 holiday weekend. As participants returned to work Monday, tax-exempts were mostly unchanged.
On Tuesday, municipal yields dropped about two basis points, while in the new-issue market New York’s Metropolitan Transportation Authority sold $600 million of notes.
This was followed by a four-basis-point rally Wednesday, and a pickup of three basis points yesterday.
The Bond Buyer 20-bond index of 20-year general obligation bond yields declined 10 basis points this week to 4.71%. This is the lowest level for the index since June 4, when it was also 4.71%.
The 11-bond index of higher-grade 20-year GO yields also declined 10 basis points this week, to 4.43%, which is the lowest it has been since May 28, when it was 4.35%.
The revenue bond index, which measures 30-year revenue bond yields, fell six basis points this week to 5.70%. This is the lowest the index has been since June 4, when it was 5.63%.
The 10-year Treasury note yield dropped 13 basis points this week to 3.41%, which is the lowest yield for the 10-year note since May 14, when it was 3.11%.
The 30-year Treasury bond yield dropped three basis points this week to 4.31%, which is the lowest it has been since May 21, when it was also 4.31%.
However, The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, rose 16 basis points this week to 0.90%. This is the highest the index has been since Jan. 28, when it was 0.93%.
The weekly average yield to maturity on The Bond Buyer 40-bond municipal bond index finished at 5.59%, up 12 basis points from last week’s 5.47%.
