Yields Narrowly Mixed in 'Bifurcated Week’

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The Bond Buyer’s weekly yield indexes were narrowly mixed, with some dipping to 43-year lows while others increased.

Evan Rourke, portfolio manager at Eaton Vance, described the period as “a bifurcated week.”

“We rallied the last two days of the month, and then from there it kind of got a little queasy,” Rourke said.

“Treasuries weakened significantly. Munis haven’t sold off that much because we still have good relative value, though the bid side has gotten softer and more people are willing to sell,” he added.

Rourke also said that an influx of supply in the new-issue market is going to be a bit of a challenge.

“Until now, yields were down so much in the market,” he said. “Now, some of that support may be fading, so when you put supply on top of it, we’ll see what happens.”

The Bond Buyer 20-bond index of 20-year general obligation bond yields declined two basis points this week to 3.86%. That is the lowest the index has been since May 4, 1967, when it was 3.79%.

The 11-bond index of higher-grade 20-year GO yields dropped one basis point this week to 3.60%, which is the lowest level for the index since April 20, 1967, when it was 3.53%.

The revenue bond index, which measures 30-year revenue bond yields, rose two basis points this week, to 4.63%, but remained below its 4.69% level from two weeks ago.

The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, rose two basis points this week to 0.51%, which is its highest level since Aug. 4, when it was 0.55%.

The yield on the 10-year Treasury note increased 13 basis points this week to 2.63%. This is the highest the yield has been since Aug. 12, when it was 2.75%.

The yield on the 30-year Treasury bond expanded by 19 basis points this week to 3.72%, which is its highest level since Aug. 12, when it was 3.95%.

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, compressed two basis points this week to 4.87%.

It is the lowest weekly average for the yield to maturity since the week ended Feb. 14, 2008, when it was 4.84%.

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