Most of The Bond Buyer's weekly yield indexes rose this week, as the municipal market endured the last sessions of an 11-day string of rising yields prior to yesterday's unchanged market.
Evan Rourke, portfolio manager at Eaton Vance, said that although tax-exempt yields edged higher in every session until yesterday, the weakness appears to be subsiding as the week concludes.
"I think what's helping us revive even from last week is we're getting a little bit of reinvestment flows in from March 1, so it's given us a little bit of money to put to work," he said. "That's helped us on the plus side, but on the negative side the calendar has been reasonable all week, so that's kind of weighing on it a little bit. You're still dealing with credit-spread widening, too.
"There's not a lot of liquidity right now," Rourke added. "It's going to be the theme for the whole year until munis either get a lot cheaper and we bring in some other buyers, or until maybe the market stabilizes a little more and somebody's willing to commit more capital to our business."
The Bond Buyer 20-bond index of GO yields rose nine basis points this week to 4.96%. This is the highest the 20-bond index has been since Feb. 5, when it was also 4.96%.
The 11-bond index of higher-grade 20-year GO yields also rose nine basis points this week to 4.74%. This is the highest level for the index since Feb. 5, when it was also 4.74%.
The revenue bond index, which measures the yields of 30-year revenue bonds, rose four basis points to 5.80%. This is the highest level for the index since Jan. 29, when it was 5.89%.
The 10-year Treasury note's yield dropped 17 basis points this week to 2.82%. This is the lowest level for the note's yield since Feb. 12, when it was 2.75%.
The 30-year Treasury bond's yield dropped 15 basis points this week to 3.51%, which is the lowest since Feb. 12, when it was 3.49%.
The Bond Buyer one-year note index, which measures one-year tax-exempt note yields, declined two basis points this week to 0.78%. This is the lowest level for the index since Feb. 4, when it was 0.77%.
The weekly average yield to maturity of The Bond Buyer 40-bond municipal bond index, which is based on long-term tax-exempt bond prices, declined three basis points this week to 3.53%. That is the lowest weekly average for the yield to maturity since the week ended Sept. 11, 2008, when it was 5.34%. BB