Most of The Bond Buyer's weekly yield indexes declined this week, as gains from an early-week rally barely withstood a sell-off yesterday.
"The market tried to push higher earlier in the week, and there were a couple good days in there. But we're certainly finishing the week on a low note," said George Strickland, managing director and portfolio manager at Thornburg Investment Management. "[Yesterday], with equities up strongly, we're seeing Treasuries fall off, and where munis have been largely resistant to that, outperforming Treasuries for most of the week, it seems like we're falling in line with Treasuries [yesterday]. I'm seeing a lot of selling pressure showing up in the secondary market, and that's making the market adjust lower."
The municipal market was firmer by two or three basis points Friday, following Treasuries. Munis were then firmer again Monday, this time by about three or four basis points.
On Tuesday, tax-exempts were unchanged, as several $100 million-plus issues were brought to market. In the new-issue market Tuesday, JPMorgan priced $333.7 million of revenue bonds for the Massachusetts Health and Educational Facilities Authority, and Merrill Lynch & Co. priced $175 million of hospital revenue bonds for Pennsylvania's Northampton County General Purpose Authority.
The muni market was again unchanged Wednesday, as an influx of new-issue supply hit the market. Leading the slate was a $600 million offering of aviation revenue bonds for Miami-Dade County, which was priced by Banc of America Securities LLC. Also Wednesday, Morgan Stanley priced $487.2 million of health facilities improvement bonds for the New York State Dormitory Authority, Clark County, Nev., competitively sold $400 million of general obligation bond bank bonds to Lehman Brothers at a true interest cost of 4.63%, and Citi priced $400 million of GOs for Connecticut.
Then, yesterday, municipals were weaker by three or four basis points, reflecting weakness in the Treasury market. In the primary market, Lehman Brothers priced $500 million of tax and revenue anticipation notes for Los Angeles County.
The Bond Buyer 20-bond index of GO yields fell three basis points this week to 4.59%, its but remained above its 4.52% level from two weeks ago.
The 11-bond index also dropped three basis points, to 4.49%, but remained above its 4.43% level from two weeks ago.
The revenue bond index fell one basis point to 5.04%, but remained above its 4.99% level from two weeks ago.
The 10-year Treasury note fell three basis points to 4.05%, but remained above its 3.92% level from two weeks ago.
The 30-year Treasury bond fell two basis points to 4.75%, but remained above its 4.63% level from two weeks ago.
The Bond Buyer one-year note index fell three basis points to 1.76%, its lowest level in six weeks, since it was 1.69% on April 23.
The weekly average yield to maturity on The Bond Buyer 40-bond municipal bond index finished at 5.13%, up one basis point from last week's 5.12%.