The Bond Buyer’s weekly yield indexes declined this week, as gains on the long end of the municipal yield curve helped carry tax-exempts to a firmer footing, despite a quietening of activity ahead of the forthcoming three-day holiday weekend.
“We had a tremendous rally on the long end, but the short end was kind of unchanged,” said Evan Rourke, portfolio manager at Eaton Vance.
“There was not a lot of supply, and a lot of people were just looking forward to past the Labor Day holiday, when some buyers will return to the market,” he said.
“The secondary market is still kind of thin. There were a few lists from customers out there that were well-absorbed. People kind of took them in stride.
Next week, the calendar looks relatively light, and there’s nothing on the competitive side, really. We may continue to have somewhat of a shortage of bonds.”
The muni market was largely unchanged Friday, Monday, and Tuesday, with patches of firmness on the long end of the curve.
Wednesday and yesterday, the overall market was firmer by about two or three basis points, though long-end yields both days were lower by about four basis points.
The Bond Buyer 20-bond index of 20-year general obligation bond yields declined 16 basis points this week to 4.37%. This is the lowest level for the index since Feb. 7, 2008, when it was 4.33%.
The 11-bond index of higher-grade 20-year GO yields also declined 16 basis points this week, to 4.11%, which is the lowest it has been since Jan. 17, 2008, when it was 4.08%.
The revenue bond index, which measures 30-year revenue bond yields, declined 16 basis points this week to 5.43%. This is the lowest the index has been since May 21, when it was 5.42%.
The 10-year Treasury note yield dropped 14 basis points this week to 3.33%. This is the lowest yield for the 10-year note since May 14, when it was 3.11%.
The 30-year Treasury bond dropped eight basis points this week to 4.15%, which is the lowest it has been since May 14, when it was 4.07%.
The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, declined three basis points this week to 0.79%. This is the lowest level for the index since July 22, when it was 0.72%.
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, finished at 5.29%, was down 11 basis points from last week’s 5.40%.
