The Bond Buyer’s weekly yield indexes mostly declined slightly this week as the summer doldrums set in for the muni market, and several large new issues in the primary market were stuck with lethargic trading and little movement.
“I think the market is captive to the lack of supply, and to the extent that supply is marginally lower than expected, it continues to support prices, so we’ll be at the behest of supply,” said Michael Pietronico, chief executive officer of Miller Tabak Asset Management. “If that was to turn around, then I would expect activity to pick up. But right now there’s just not enough supply for that to happen.”
“We’re definitely outperforming Treasuries, and at this point I would say the muni market is a little firmer on the week, but that’s very specific to the early part of the yield curve. The longer end seems relatively unchanged,” Pietronico said.
Despite the quiet week, several large deals were priced in the primary market. Among them were $1.9 billion of New Jersey tax and revenue anticipation notes and $960 million of debt for the Metropolitan Washington Airports Authority, including $400 million of taxable Build America Bonds.
The Bond Buyer 20-bond index of 20-year general obligation bond yields declined four basis points this week to 4.65%. This is the lowest the index has been since May 28, when it was 4.61%.
The 11-bond index of higher-grade 20-year GO yields declined three basis points this week to 4.38%, which is the lowest level for the index since May 28, when it was 4.35%.
The revenue bond index, which measures 30-year revenue bond yields, rose two basis points this week to 5.68%. This is the highest level for the index since July 9, when it was 5.70%.
The 10-year Treasury note yield rose 12 basis points this week to 3.76%, which is the highest it has been since June 18, when it was 3.85%.
The 30-year Treasury bond yield rose nine basis points this week to 4.53%, but remained below its 4.58% level from two weeks ago.
The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, declined two basis points this week to 0.81%, but it remained above its 0.72% level from two weeks ago.
The weekly average yield to maturity on The Bond Buyer’s 40-bond municipal bond index, which is based on 40 long-term municipal bond prices, finished at 5.58%, down one basis point from last week’s 5.59%.