Most of The Bond Buyer's weekly yield indexes increased this week, as last week's rally ebbed Monday and was followed by several mostly weaker sessions.

George Strickland, managing director and portfolio manager at Thornburg Investment Management in Santa Fe, N.M., said that one of the main factors that weighed negatively on the market the past few sessions has been the infusion of a couple of bid lists.

"[Goldman, Sachs & Co.] had that big list of high-yield paper out for the bid, and then [Nuveen Investments LLC] sort of piled in on top of that," Strickland said. "That's about half a billion dollars worth of high-yield muni bid wanteds, and most of them traded, and that sort of reset prices in high yield and a lot of mid-tier credits as well."

"So I think a lot of the players on the Street are still a little traumatized by that. We're trying to rally in here but it's not easy, because everyone's sort of on edge, wondering when the next bid list will show up," he said.

Strickland also said that he thinks the market will continue to "bounce around quite a bit with some heavy volatility, but we're going to stay in extreme value territory."

"I think we're going to have more rounds of secondary selling, though maybe not as much of the deleveraging if money market rates can stay low," he said. "Plus, if you add to that the backlog of new-issue supply, some of which really has to get done, it's going to keep us in that extreme value territory."

Yields in the municipal market declined Friday for the fourth straight session, as retail and institutional demand for bonds persisted and firmness continued to permeate the market to the tune of seven to nine basis points. However, on Monday the pace slowed, and traders said tax-exempts were flat to slightly firmer. This was followed Tuesday by muni yields rising four or five basis points, sending the market into negative territory for the first time in a week.

Wednesday then saw a largely mixed municipal market, after the Federal Open Market Committee opted to lower its federal funds rate target by 50 basis points to 1.00%.

Yesterday, tax-exempts were unchanged to weaker by two or three basis points, following losses in the Treasury market.

The Bond Buyer 20-bond and 11-bond GO indexes both rose three basis points this week, to 5.35% and 5.24%, respectively. However, they remain well below their levels from two weeks ago, when they were 6.01% and 5.89%.

The revenue bond index also rose three basis points this week, to 6.09%, but it was still well below its 6.48% level from two weeks ago.

The 10-year Treasury note yield rose 34 basis points this week to 3.94%, but it remained below its 3.95% level from two weeks ago.

The 30-year Treasury bond yield rose 30 basis points this week to 4.29%. That is its highest level since Sept. 25, when it was 4.40%.

The Bond Buyer one-year note index fell 31 basis points this week to 2.00%. That is the lowest the index has been since Sept. 17, when it was 1.93%.

The weekly average yield to maturity on The Bond Buyer 40-bond municipal bond index finished at 5.96%, down 39 basis points from last week's 6.35%.

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