Rebounding from Wednesday, the long end of the yield curve retraced some of its strength on Thursday morning as the equities market slowed losses during its six-day bleed.
Yields on bond maturing between 2023 through 2044 all weakened, with bonds maturing between 2026 through 2030 softening between two and four basis points, according to the Municipal Market Data triple-A 5% curve. Yields on bonds maturing between 2023 through 2025 and 2031 through 2044 weakened up to two basis points, according to MMD data.
The front end of the curve kept strengthening, as much as four basis points in bond maturing between 2018 and 2019, according to MMD.
"The market's doing a little correcting from something of an overreaction to equities earlier this week, said a West-coast based trader. "We've been seeing blood bathes in equities though, the reaction made sense."
The Treasury market seemed to plateau at new lows after yields fell dramatically on Tuesday and Wednesday. The two-year strengthened two basis points to 0.35% compared to Wednesday's market close, as both the 10- and 30-year weakened two basis points to 2.17% and 2.94 respectively.
Deals coming to market today are still expected to benefits from the market's strength on Thursday, agreed traders. At the time of publication, none of the day's major deals had announced pricing.
Secondary trading was mixed as trader digested the week's events. Top trader New Jersey Tobacco Settlement Financing Corporation fetched over $40 million in trading as yields on the 5s of 2041 rose five basis points to 7.27% from 7.22% the day prior, according to Municipal Securities Rulemaking Board's disclosure website, EMMA.
However, yields on another top trader, Providence Health & Services, saw yields drop nearly 40 basis points, and yields on its 5 of 2044 fell to 3.162% from 3.57% the day prior in round lot trading, according to EMMA.
