The Bond Buyer's weekly yield indexes declined as investors returned to work after the holidays and finished the week to date with four consecutive firmer sessions.

"The market came into 2009 with a lot of cash and short duration, and that was to be expected, considering how volatile 2008 was," said Michael Pietronico, chief executive officer of Miller Tabak Asset Management. "So the fact that the market is rallying here in the first week should not surprise anyone. It generally does on any given year. And the financial press has been very helpful in touting the asset class as attractive, so it's brought some interest."

The municipal bond market was unchanged Friday on a slow day of trading to kick off 2009. On Monday, tax-exempts were flat with a slightly firmer tone.

Munis showed their first marked improvement of the week on Tuesday, as yields dropped about three basis points overall in moderate activity, while the positive tone accelerated on Wednesday.

The market was firmer by six or seven basis points on Wednesday, as most of the week's largest scheduled deals were priced in the primary market. In the largest deal of the session, Citi accelerated the pricing schedule on its $1.1 billion tax-exempt and taxable revenue bond sale for New York's Empire State Development Corp., which was originally slated for pricing yesterday.

Yesterday, the municipal market was again firmer, this time by about five or six basis points.

The Bond Buyer 20-bond index of GO yields declined 22 basis points this week to 5.02%. This is the lowest yield for the index since Sept. 11, when it was 4.54%. The index has fallen 83 basis points in the past four weeks, from 5.85% on Dec. 11.

The 11-bond index of higher-grade 20-year GO yields dropped 21 basis points to 4.80%. This is the lowest the index has been since Sept. 11, when it was 4.45%. The index has fallen 85 basis points in the past four weeks, from 5.65% on Dec. 11.

The revenue bond index, which measures 30-year revenue bond yields, declined 10 basis points to 5.90%, which is the lowest the index has been since Oct. 2, when it was 5.69%. The index has declined 49 basis points in the past four weeks, from 6.39% on Dec. 11.

The municipal market improved as the 10-year Treasury note yield increased 22 basis points this week to 2.44%, which is the highest it has been since Dec. 11, when it was 2.62%. The 10-year note's yield has risen 39 basis points in the past three weeks from a half-century low of 2.05% on Dec. 18.

The 30-year Treasury bond yield rose 35 basis points to 3.03%, which is the highest level since Dec. 11, when it was 3.06%. The 30-year bond's yield has risen 50 basis points from its all-time low of 2.53% on Dec. 18.

The Bond Buyer one-year note index, which measures one-year tax-exempt note yields, declined 19 basis points to 1.09%, which is the lowest it has been since Feb. 13, when it was 1.02%.

The weekly average yield to maturity on The Bond Buyer 40-bond municipal bond index finished at 5.90%, down six basis points from last week's 5.96%.

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