Bond yields at a glance | ||||
MBIS benchmark (~AA) | MBIS AAA | MMD AAA | U.S. Treasuries | |
10 year | 2.614 | 2.497 | 2.39 | 2.77 |
30 year | 3.039 | 2.940 | 2.93 | 3.01 |
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MBIS indices are updated hourly on the Bond Buyer Data Workstation. | ||||
Municipal bond yields rose along with Treasuries on Thursday, a day after the Federal Reserve signaled it could raise interest rates at its next meeting in March. The Treasury 10-year rose past 2.75%, its highest level in almost four years, while the 30-year yield moved up above 3%.
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 the stage is now set for a rate hike next month under her successor Jerome Powell.
Also weighing on bonds was the Treasury announcement that it intends increase the size of its auctions by about $42 billion over the next quarter, reflecting larger sales of two- and three-notes, two-year floating-rate notes and five-, seven-, 10-, and 30-year securities.
Since the beginning of the year, 10-year MBIS benchmark muni yields have risen by about 33 basis points while yields on top-rated 10-year MMD munis have risen by around 41 basis points.
In late trading, the MBIS municipal non-callable 5% GO benchmark scale was weaker while the MBIS AAA scale was mixed.
The 10-year MBIS muni benchmark yield rose to 2.614% on Thursday from the final read of 2.590% on Wednesday, according to
The 10-year MBIS muni AAA yield decreased to 2.497% in Thursday trading from the final read of 2.504% on Wednesday, according to
The MBIS benchmark index is updated hourly on the
Turning to top-quality bond reads, munis ended weaker on Thursday, according to Municipal Market Data. The yield on MMD’s 10-year benchmark muni general obligation rose four basis points to 2.39% from 2.35% on Wednesday, while the 30-year GO yield increased two basis points to 2.92% from 2.91%, according to the final 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%, according to MMD.
U.S. Treasuries were weaker in late trading. The 10-year Treasury yield rose to 2.77% from 2.73% while the yield on the 30-year Treasury increased to 3.01% from 2.95%.
On Thursday, the 10-year muni-to-Treasury ratio was calculated at 86.1% compared with 86.5% on Wednesday, while the 30-year muni-to-Treasury ratio stood at 97.4% versus 96.6%, according to MMD.
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.
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.
Treasury announces bill auctions
The Treasury Department announced it will auction $48 billion of 91-day bills on Feb. 5; $42 billion of 182-day bills on Feb. 5; and $30 billion of 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.
