Nearly all The Bond Buyer's weekly yield indexes declined this week, as the municipal market was firmer in most of the week's sessions, and investors digested a healthy amount of new-issue supply.

"We're certainly a little better on the week," said Fred Yosca, managing director and head of trading at BNY Capital Markets. "We're seeing decent order flow, and supply got digested. But now we're getting into a late-in-August-week quiet."

The municipal market was firmer by one or two basis points Friday, following the improving Treasury market. Munis were then unchanged to firmer by one basis point on Monday, again following Treasuries.

On Tuesday, however, tax-exempts were mixed, showing gains on the short end of the market, but losses on the long end. Additionally, the week's largest deal was priced in the primary market, as Texas competitively sold $6.4 billion of tax and revenue anticipation notes to various bidders. This is the state's largest deal since it sold $6.6 billion in 2004. Citi won the largest chunk of the deal, worth $1.05 billion, with a net interest cost of 1.645% billion. The deal was split into 25 pieces, with eight different underwriters taking home bonds.

On Wednesday, the municipal market was unchanged to slightly firmer, as participants digested the week's heaviest slate of long-term new issuance in the primary market.

Leading the way, Morgan Stanley priced $917.6 million of revenue bonds for the Arizona Health Facilities Authority. Also of note, Goldman, Sachs & Co. priced $659.3 million of second general highway and bridge trust fund bonds for the New York State Thruway Authority. And yesterday, the municipal market was slightly weaker, with yields rising one or two basis points, following Treasuries.

The Bond Buyer 20-bond index of GO yields fell three basis points this week to 4.64%, which is the lowest since July 10, when it was 4.56%.

The 11-bond index fell four basis points to 4.54%, which is the lowest since July 10, when it was 4.47%.

The revenue bond index fell two basis points to 5.15%, which is the lowest since July 17, when it was 5.11%.

The 10-year Treasury note fell six basis points to 3.83%, which is the lowest since July 10, when it was 3.81%.

The 30-year Treasury bond fell five points to 4.46%, which is the lowest since July 10, when it was 4.42%. basis

The Bond Buyer one-year note index was unchanged this week at 1.59%.

The weekly average yield to maturity on The Bond Buyer 40-bond municipal bond index fell three basis points this week to 5.28%, which is the lowest since the week ended July 17, when it was 5.15%.

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