Bond yields at a glance

MBIS benchmark (~AA)

MBIS AAA

MMD AAA

U.S. Treasuries

10 year

2.603

2.480

2.35 (+1-3 bps)

2.75

30 year

3.033

2.931

2.91 (Unch)

2.95

MBIS indices are updated hourly on the Bond Buyer Data Workstation.

Bank of America Merrill Lynch won a large note sale in the primary sector on Thursday as the market eyes bond yields, which have been on a tear since the beginning of the month.

The municipal bond market is focusing its attention on Thursday on rising bond yields a day after the Federal Reserve signaled it could raise interest rates at its next meeting in March.

The Federal Open Market Committee left interest rates unchanged at the conclusion of its two-day monetary policy meeting on Wednesday. It was Janet Yellen’s last FOMC meeting and set the stage for a rate hike next month under her successor Jerome Powell.

Fed Chair-designate Jerome Powell with President Trump
Fed Chair-designate Jerome Powell with President Trump Bloomberg News

Since the beginning of the year, 10-year muni yields have risen by about 32 basis points while yields on top-rated 10-year munis have risen by around 37 basis points.

In midday trading, the MBIS municipal non-callable 5% GO benchmark scale was weaker while the MBIS AAA scale was stronger.

The 10-year MBIS muni benchmark yield rose to 2.603% on Thursday from the final read of 2.590% on Wednesday, according to Municipal Bond Information Services. The MBIS 30-year benchmark muni yield gained to 3.033% from 3.028%. On Jan. 2, the 10-year MBIS muni yield stood at 2.280% while the 30-year muni yield was at 2.744%.

The 10-year MBIS muni AAA yield decreased to 2.480% in Thursday trading from the final read of 2.504% on Wednesday, according to Municipal Bond Information Services. The MBIS 30-year AAA muni yield fell to 2.931% from 2.935%.

The MBIS benchmark index is updated hourly on the Bond Buyer Data Workstation.

Turning to top-quality bond reads, munis were mixed at mid-session, according to Municipal Market Data. The yield on MMD’s 10-year benchmark muni general obligation rose one to three basis points from 2.35% on Wednesday, while the 30-year GO yield was unchanged at 2.91%, according to a read of MMD’s triple-A scale.

On Jan. 2, the 10-year muni yield stood at 1.98% while the 30-year muni yield was put at 2.55%.

U.S. Treasuries were weaker in midday trading. The 10-year Treasury yield rose to 2.75% from 2.73% while the yield on the 30-year Treasury increased to 2.97% from 2.95%.

On Wednesday, the 10-year muni-to-Treasury ratio was calculated at 86.5% compared with 84.1% on Tuesday, while the 30-year muni-to-Treasury ratio stood at 96.6% versus 99.0%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 47,799 trades on Wednesday on volume of $13.37 billion.

California, New York and Texas were the three states with the most trades on Tuesday, with the Golden State taking 14.196% of the market, the Empire State taking 10.178% and the Lone Star State taking 9.945%.

Primary market
In the short-term competitive sector, Westchester County, N.Y., sold $150 million of tax anticipation notes for 2018 taxes.

Bank of America Merrill Lynch won the notes with a bid of 2% plus $389,250 premium, an effective rate of 1.158378%.

The notes, due May 29, were priced as 2s to yield 1.10%

The deal is unrated.

Bond Buyer 30-day visible supply at $5.10B
The Bond Buyer's 30-day visible supply calendar increased $35.2 million to $5.10 billion on Thursday. The total is comprised of $1.56 billion of competitive sales and $3.54 billion of negotiated deals.

Tax-exempt money market funds saw outflows
Tax-exempt money market funds experienced outflows of $285.1 million, bringing total net assets to $137.52 billion in the week ended Jan. 29, according to The Money Fund Report, a service of iMoneyNet.com.

This followed an inflow of $1.68 billion on to $137.80 billion in the previous week.

The average, seven-day simple yield for the 197 weekly reporting tax-exempt funds fell to 0.69% from 0.75% the previous week.

The total net assets of the 828 weekly reporting taxable money funds decreased $25.32 billion to $2.638 trillion in the week ended Jan. 30, after an inflow of $24.17 billion to $2.663 trillion the week before.

The average, seven-day simple yield for the taxable money funds increased to 0.97% from 0.64% from the prior week.

Overall, the combined total net assets of the 955 weekly reporting money funds decreased $25.61 billion to $2.775 trillion in the week ended Jan. 30, after inflows of $25.85 billion to $2.801 trillion in the prior week.

Treasury announces bill auctions
The Treasury Department announced these auctions: $48 billion 91-day bills on Feb. 5; $42 billion 182-day bills on Feb. 5; and $30 billion 70-day cash management bills on Feb. 6

--Gary Siegel contributed to this report.

Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation. Click here for a brief tour of the Workstation, or contact Vanessa Kim at 212-803-8474 for more information.

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