The municipal bond market was winding down the week a day early as participants on Thursday were left watching yields rise as issuance evaporated ahead of a holiday-shortened week.
Secondary Market
Treasuries were stronger on Thursday morning. The yield on the two-year Treasury dipped to 1.23% from 1.25% on Wednesday, while the 10-year Treasury fell to 2.48% from 2.50%, and the yield on the 30-year Treasury bond decreased to 3.07% from 3.09%.
Top-quality municipal bonds ended weaker on Wednesday. The 10-year benchmark muni general obligation yield rose six basis points to 2.43% from 2.37% on Tuesday, while the yield on the 30-year GO increased five basis points to 3.17% from 3.12%, according to the final read of Municipal Market Data's triple-A scale.
Municipal bond yields have generally been on a slow but steady rise over the past week. Since Feb. 6, yields on the 10-year muni have risen 13 basis points.
On Wednesday, the 10-year muni to Treasury ratio was calculated at 97.2% compared to 96.0% on Tuesday, while the 30-year muni to Treasury ratio stood at 102.6%, versus 101.9%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 52,500 trades on Wednesday on volume of $15.535 billion.
Primary Market
After a busy two days, the new issue sector slowed down to a crawl, with no major issuance set for Thursday or Friday. The market will be closed on Monday in observance of Presidents' Day.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $247.8 million to $6.52 billion on Thursday. The total is comprised of $2.58 billion of competitive sales and $3.94 billion of negotiated deals.
Tax-Exempt Money Market Fund Outflows
Tax-exempt money market funds experienced outflows of $539.1 million, bringing total net assets to $131.27 billion in the week ended Feb. 13, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $1.30 million to $131.81 billion in the previous week.
The average, seven-day simple yield for the 233 weekly reporting tax-exempt funds was unchanged from 0.22% in the previous week.
The total net assets of the 863 weekly reporting taxable money funds increased $970.3 million to $2.513 trillion in the week ended Feb. 14, after an outflow of $6.54 billion to $2.512 trillion the week before.
The average, seven-day simple yield for the taxable money funds was steady from 0.27% in the prior week.
Overall, the combined total net assets of the 1,096 weekly reporting money funds rose $431.2 million to $2.645 trillion in the week ended Feb. 14, after outflows of $5.24 billion to $2.644 trillion in the prior week.
