The municipal market Thursday saw heavy trading activity amid rapidly sinking yields and attractive values to Treasuries.

Trading in markets around municipals resembled a hurricane, with a flurry of buying in Treasuries and a global-level sell-off in the stock market setting the scene.

“The market was going 110 miles an hour today, and not stopping for stop signs,” a trader in Chicago said.

Amid the chaos, muni yields continued their downward streak, according to the Municipal Market Data triple-A scale. Essentially they picked up steam along the yield curve, flattening it as they went.

Maturities in 2012 were unchanged. Thereafter, yields proceeded to drop almost at an accelerating pace.

They fell one basis point in 2013 and three basis points in 2014. They fell five basis points in 2015 and 2016, four basis points from 2017 through 2019, and seven basis points in 2020 and 2021. Beyond 2021, they were 10 basis points lower.

The benchmark 10-year muni yield dropped seven basis points, finishing Thursday at 2.38%. That equals its lowest yield in two years, dating to Oct. 7. It has dropped 29 points in a week.

The 30-year muni yield ended at 3.95%, its lowest since early November. Its yield has dropped 40 basis points since last Friday.

The two-year muni yield ticked down another basis point to 0.35%, its lowest yield since Aug. 31, 2010.

Treasury yields rallied hard Thursday. The 10-year Treasury yield plunged 19 basis points to 2.42%, its lowest level since Oct. 12. In mid-April, it yielded at much as 3.59%, or 117 basis points more than on Thursday.

The two-year Treasury yield breached the crust and bore into the mantle as it reached a record low, dropping six basis points to 0.27%.

The 30-year yield has plummeted an incredible 67 basis points since last Friday. It fell 21 basis points on the day to 3.68%, its nadir since Oct. 6.

The nature of the rally has kept munis relatively attractive to Treasuries. As munis underperformed Treasuries for another session, their ratios continued to rise.

Ratios to Treasuries at the 10-year and 30-year marks are much higher than their respective three-month, one-year, and year-to-date averages, according to MMD numbers.

Lighter supply is driving munis right now, traders have said. Just $3.25 billion in new supply is expected this week after issuers decided to exercise caution against borrowing during so a volatile period. But prices showed that those issuers who took chances in the market thus far have gotten good deals.

Bank of America Merrill Lynch paced the negotiated market Thursday as it priced $350 million of San Buenaventura, Calif., revenue bonds for the Community Memorial Health System. The bonds are rated Ba2 by Moody’s Investors Service and BB by Standard & Poor’s.

Yields range from 5.11% with a 5.00% coupon in 2016 to 7.65% with a 7.50% coupon in 2041.

Bank of America also priced $347.2 million of Port of Oakland refunding revenue bonds, which are rated A2 by Moody’s, A by Standard & Poor’s, and A-plus by Fitch Ratings.

Yields range from 1.24% with coupons of 1.50% and 4.00% in a split maturity in 2013 to 5.20% with a 5.125% in 2031. Debt maturing in 2012 was offered in a sealed bid.

In the competitive market, JPMorgan won $272.5 million of Virginia College Building Authority educational facilities revenue bonds for 21st Century college and equipment programs. The bonds are rated double-A plus by all three agencies.

Yields range from 0.27% with a 3.00% coupon in 2013 to 4.10% with a 4.00% coupon in 2032.

Investors and traders with growing concerns about the economy tore a veritable pound of flesh out of the equities markets Thursday. The major stock market indexes were down by at least 4.31% on the day, with the Nasdaq leading the way by plunging 5.08%. The Dow Jones Industrial Average got walloped, falling almost 513 points.

European investors pulled money out of stocks in large amounts recently, traders said. As various European stock market indexes have struggled alongside recent U.S. economic indicators, Europeans have seen the need to find safe havens.

“You’ve got European buyers coming into our market, coming for safety,” a tax-exempt trader in New York said. “They’re now assured that we’re going to increase the debt ceiling and cut back [spending].”

The bond market couldn’t have predicted this behavior one week ago, a muni trader in New Jersey added.

“They’ve got to do something with the money when they sell a stock,” he said. “A week ago, we would not have thought that Treasuries were such a safe haven when the threat of default was looming over our heads like a dark cloud.”

And U.S. economic news hasn’t painted the prettiest picture, either. The Labor Department reported Thursday that initial jobless claims fell to 400,000 for the week ending July 30. And continuing claims for the week ending July 23 rose to 3.73 million.

Economists had predicted 405,000 initial jobless claims and 3.70 million continuing claims, according to the median estimate from Thomson Reuters. The industry awaits Friday’s employment situation, issued by the Bureau of Labor Statistics division of the Labor Department.

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