The Bond Buyer’s weekly yield indexes were narrowly mixed this week as municipals remained unchanged through much of the week, with the tone shifting from negative to positive.
“For the week, underperformance versus Treasuries was the big story,” said Michael Pietronico, chief executive officer of Miller Tabak Asset Management.
“Munis have certainly lagged the drop in interest rates on the taxable side. But the bright side is there seems to be some money coming into the market with the recognition that the Fed would be on hold for a lot longer than perhaps what many thought.”
“It seems that July will be a lot more fruitful than June has been,” he continued. “Selling pressure on the tax-exempt side will be very minimal. The end of the quarter will be upon us and certainly there is a lot of money around after July.”
The Bond Buyer 20-bond index of 20-year general obligation bond yields was unchanged this week at 4.40%, the highest for the index since April 15, when it was 4.43%.
The 11-bond index of higher-grade 20-year GO yields rose two basis points this week to 4.14%, which is its highest level since April 15, when it was also 4.14%.
The revenue bond index, which measures 30-year revenue bond yields, declined one basis point this week to 4.85%, but it remained above its 4.82% level from two weeks ago.
The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, also declined one basis point this week to 0.56%, but remained above its 0.52% level from two weeks ago.
The yield on the 10-year Treasury note declined seven basis points this week to 3.13%, which is its lowest level since May 14, 2009, when it was 3.11%.
The yield on the 30-year Treasury bond declined four basis points this week to 4.09%, which is its lowest level since Oct. 8, 2009, when it was 4.08%.
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, increased three basis points this week to 5.18%.
This is the highest weekly average for the yield to maturity since the week ended April 15, when it was 5.20%.
Priti Patnaik contributed to this column.
