Muni yields and indexes have risen modestly since Friday, according to the Municipal Market Data scale. But traders throughout the week have remarked how the market seems stronger, as several larger deals arrived early and were well-received.
Nevertheless, despite their moderate weakness, muni yields have been mixed compared with those of Treasuries since Friday. They were stronger at the front of the curve and weaker in the belly.
Treasuries started the week slightly firmer. But they jumped on Wednesday after news from the Federal Open Market Committee that there was no need for another round of quantitative easing.
The Bond Buyer’s 20-bond GO index of 20-year general obligation yields increased six basis points this week to 4.08%. It sits at its highest level since Dec. 1, when it was 4.12%.
The 11-bond GO index of higher-grade 20-year GO yields also rose six basis points this week to 3.86%. That represents its highest level since Oct. 13, when it was 3.91%.
The yield on the U.S. Treasury’s 10-year note increased eight basis points this week to 2.24%, but it remains below its 2.28% level from two weeks ago.
The yield on the Treasury’s 30-year bond rose 10 basis points this week to 3.37%, the same level as two weeks ago.
The calendar and bouncing Treasury yields have guided the market this past week, according to Howard Mackey, president of the broker-dealer unit of Rice Financial Products.
“Treasuries have bounced back a little bit, which helps us,” he said. “And the fact that we have a pretty small calendar really helps. MMD will tend to lag our market from time to time. Give it a little time to see it adjust.”
The revenue bond index, which measures 30-year revenue bond yields, gained three basis points this week to 4.88%, the same level it reached two weeks ago.
The Bond Buyer’s one-year note index, which is based on one-year GO note yields, was unchanged this week at 0.25%. It remains at its highest level since Feb. 29, when it was also 0.25%.
The weekly average yield to maturity of The Bond Buyer municipal bond index, which is based on 40 long-term bond prices, declined two basis points this week to 4.62%.
It is the lowest weekly average for the yield to maturity since the week ended March 8, when it was 4.59%.