Yields Are Mixed Amid Typical Sleepy Summer Trading

The Bond Buyer’s weekly yield indexes were mixed this week, as municipals traded quietly and sluggishly in the secondary market amid a light new-issue calendar.

Evan Rourke, portfolio manager at Eaton Vance, said this week has been a typical “summer market.”

“It’s really been kind of a low-volume, hard-to-draw-up-interest market,” he said. “Steady, slow demand, and I think high grades in particular are seeing some good interest. We’ve written some pretty impressive high-grade tickets, but the size is small, and you’re selling them to mom and pop, or their proxies, so you’re not writing $5 million tickets, you’re writing a million and a half here, $500,000 there.

“On the week, you had a slight backup in yields, a lot of it in sympathy with the Treasury market,” Rourke said. “Treasuries have been bouncing a little today, but munis have had a real lethargic feel all week.”

The municipal market was largely unchanged Friday, in light secondary market trading activity. Then on Monday, munis were slightly weaker, following Treasuries.

Municipals moved sideways Tuesday in light to moderate trading activity, and remained mixed Wednesday. And ­yesterday, tax-exempts were quiet and unchanged.

The Bond Buyer 20-bond index of 20-year general obligation bond yields was unchanged this week at 4.69%.

 The 11-bond index of higher-grade 20-year GO yields rose one basis point this week to 4.41%, which is the highest it has been since July 9, when it was 4.43%.

 The revenue bond index, which measures 30-year revenue bond yields, declined one basis point this week to 5.66% — the same level as two weeks ago.

 The 10-year Treasury note yield declined five basis points this week to 3.64%, but remained above its 3.57% level from two weeks ago.

The 30-year Treasury bond yield declined 14 basis points this week to 4.44%, which is the lowest it has been since July 9, when it was 4.31%.

 The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, rose 11 basis points this week to 0.83%. That is the highest level for the index since July 8, when it was 0.90%.

The weekly average yield to maturity on The Bond Buyer’s 40-bond municipal bond index, which is based on 40 long-term municipal bond prices, rose one basis point this week to 5.59%. This is the highest weekly average for the yield to maturity since the week ended July 9, when it was also 5.59%.

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