NEW YORK — Treasury yields are falling steadily as the trading session heads for the week’s finish line. But muni yields, with little action in the primary or secondary markets are falling to a lesser degree.
“On the secondary front, there’s just hardly a bond even to bid,” a trader in California said. “Numbers are pretty strong still. People are realizing the rates are here to stay. It’s a resistant market, from today and yesterday. A lot of guys don’t like the rates, but they have so much cash; they have to put it to work
Treasuries are to some degree following the stock market, which is heaving over more uncertainty in Europe. Issues concerning the European Central Bank’s plans for buying bonds are roiling the markets, and Treasuries and U.S. equities are feeling the effects.
“We’re certainly not following Treasuries,” the trader said of muni yields. “There’s not enough follow-through and actual trading going on to warrant much bump in the scale. We’re about steady.”
Tax-exempt yields have started to slide, according to the Municipal Market Data scale. Yields are flat for maturities out to six years. Those beyond 2017 are flat to two basis points lower.
The benchmark 10-year yield Thursday again reached a record low, as measured by MMD. It ticked down one basis point on the day to 2.08%. It has fallen 16 points since Sept. 1.
The 30-year yield also inched down a basis point to 3.67%, its lowest level since Aug. 31, 2010.
The two-year yield held fast at 0.30% for a 21st consecutive session, hovering at its lowest level in more than 40 years.
Treasury yields, after opening somewhat weaker, have begun to rally. The 10-year benchmark yield has fallen six basis points to its low for the week, 1.91%, lingering around levels it hasn’t seen in more than 50 years.
The 30-year yield, after moving up three basis points this morning, has fallen to 3.27%, a four basis point slide from Thursday’s close. The two-year yield has decreased three basis points to 0.17%.
The equities markets are struggling into the afternoon. The major indexes were all down at least 2.19%. The Dow Jones Industrial Average has fallen 280 points thus far on the day.
