The Bond Buyer's weekly yield indexes declined this week, as tax-exempt yields fell in each of the holiday-shortened week's sessions.
"Obviously, we had the interruption of the holiday, which kind of broke things up a little bit, but there's been a little bit of steepening in the curve," said Evan Rourke, portfolio manager at MD Sass. "There's definitely a widening out of credit spreads. The [Municipal Market Data] scale is a reasonable reflection of your high-grade triple-As, but the minute you start to go to a weak double-A, you've widened out. So some of that performance you're seeing in the MMD scale probably didn't pass through to every bond. So your portfolio may not quite have moved up as much."
"We're seeing a lot of individual investor interest still," Rourke added. "A lot of these deals are selling out in the retail order period. The supply seems to be very manageable so far. It's bringing in buyers because they are growing comfortable that they're buying bonds at a market price."
The municipal market was firmer Friday, despite Treasury market losses. Traders said tax-exempt yields were lower by two to four basis points overall. On Monday, munis were quiet and unchanged during the abbreviated session ahead of the Veteran's Day close.
Tax-exempts were slightly firmer Wednesday, following Tuesday's one-day pause in observance of Veteran's Day. Traders said tax-exempt yields were lower by three or four basis points.
In the new-issue market Wednesday, JPMorgan priced $100 million of homeowner mortgage revenue bonds for the Florida Housing Finance Corp. JPMorgan also priced $78.7 million of bulk power supply system revenue bonds for the Jacksonville Electric Authority.
The municipal market was unchanged to slightly firmer yesterday. Traders said tax-exempt yields were flat to lower by one or two basis points.
In the new-issue market yesterday, Morgan Stanley priced $769 million of personal income tax revenue bonds for the Dormitory Authority of the State of New York. Also, JPMorgan priced $122 million of bonds for Virginia's Louisa Industrial Development Authority.
The Bond Buyer 20-bond index and the 11-bond index of GO bond yields both declined 10 basis points this week, to 5.14% and 5.03%, respectively. This is the lowest the indexes have been since Sept. 18, when they were 5.03% and 4.94%, respectively. The 20-bond index has declined 87 basis points and the 11-bond index 86 basis points from their most recent highs of 6.01% and 5.89% on Oct. 16.
The revenue bond index of 30-year revenue bond yields declined four basis points this week to 5.98%, which is the lowest since Oct. 9, when it was 5.97%. The index has declined 50 basis points since its recent high of 6.48% on Oct. 16.
The 10-year Treasury note yield rose 18 basis points this week to 3.86%, but remained below its 3.94% level from two weeks ago.
The 30-year Treasury bond yield rose 16 basis points to 4.34%, which is the highest it has been since Sept. 25, when it was 4.40%.
The Bond Buyer one-year note index declined 17 basis points this week to 1.53%. This is the lowest the index has been since Feb. 13, when it was 1.02%. The index has fallen 116 basis points from its most recent high of 2.69% on Oct. 15.
The weekly average yield to maturity on The Bond Buyer 40-bond municipal bond index finished at 5.85%, down 11 basis points from last week's 5.96%.
