The Bond Buyer's weekly yield indexes rose this week, as tax-exempt yields either remained unchanged or climbed higher in each of the week's sessions, and a weaker tone permeated throughout.

"We've just sort of run out of retail interest. Demand is lower," said Matt Fabian, managing director at Municipal Market Advisors. "People are more concerned about inflation risk, and hedging hasn't gotten any easier. Plus, the offering curve is extremely rich, so the risk of negative price movements is very high, and with more limited demand. I think that most buyers have realized this and slowed down their buying. So, although there are positive things out there, there are definitely reasons for pause."

The municipal market was slightly weaker Friday, following Treasuries, with the economic and new-issue calendars largely inactive. Then, Monday, tax-exempts were unchanged, but with a slightly weaker tone.

On Tuesday, munis were again largely unchanged. In the new-issue market, Morgan Stanley priced $288.1 million of fixed-rate refunding bonds for the New Jersey Educational Facilities Authority.

Then, Wednesday, the muni market was largely unchanged, with a slightly weaker tone, as the California Department of Water Resources came to market with a $633 million revenue bond offering. Also Wednesday, UBS Securities LLC priced $462.8 million of school facilities construction refunding bonds for the New Jersey Economic Development Authority.

And, yesterday, municipals were weaker by one or two basis points, and Lehman Brothers priced $462.1 million of unlimited tax general obligation bonds for the Chicago Board of Education.

The Bond Buyer 20-bond index of GO yields rose six basis points this week to 4.68%, its highest level since April 3, when it was 4.90%.

The 11-bond index also rose six basis points, to 4.59%, its highest level since April 3, when it was 4.82%.

The revenue bond index rose four basis points to 5.10%, the highest level since April 3, when it was 5.18%.

The 10-year Treasury note rose 12 basis points to 3.84%, its highest level since Feb. 14, when it was 3.85%.

The 30-year Treasury bond rose five basis points to 4.56%, its highest level since March 18, when it was 4.57%.

The Bond Buyer one-year note index rose 13 basis points to 1.69%, which is the highest it has been since March 19, when it was 1.77%.

The weekly average yield to maturity on The Bond Buyer 40-bond municipal bond index finished at 4.99%, up four basis points from last week's 5.03%.


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