The Bond Buyer’s weekly yield indexes were mixed during this holiday-shortened week.
“It was a weird little week, just because it was short,” said Evan Rourke, portfolio manager at Eaton Vance. “You had to cram everything into a couple of days in terms of underwriting, so that kind of added a weird effect to it.”
“There was a slight curve-steepener, part of which is in reaction to Treasury auctions, part of which was just the result of demand down the curve rather than selling up the curve,” Rourke said. “Interest has been good — what we’ve seen this week is return of retail-type interest. So you’re seeing individual investors writing a decent amount of 100-bond, 200-bond tickets, relatively small-sized tickets, on the sell side.”
“There’s also a little bit on the dealer side of moving into year-end mode,” he added. “Some of these guys have had good years, and it seems like they’re willing to take a more relaxed stance in the market. They don’t want to jeopardize their performance, I guess. The bid-ask spread has widened out a little bit.”
Leading the new-issue market, the California Statewide Communities Development Authority sold $1.9 billion of revenue bonds.
The Bond Buyer 20-bond index of 20-year general obligation bond yields declined one basis point this week to 4.40%, but it remained above its 4.39% level from two weeks ago.
The 11-bond index of higher-grade 20-year GO yields dropped two basis points this week to 4.12%, but it remained above its 4.11% level from two weeks ago.
The revenue bond index, which measures 30-year revenue bond yields, rose one basis point this week to 5.02%, which is the highest the index has been since Sept. 10, when it was 5.33%.
The 10-year Treasury note declined eight basis points this week to 3.46%, which is the lowest it has been since Oct. 22, when it was 3.42%. The 30-year Treasury bond dropped one basis point this week to 4.40%, but it is still higher than its 4.35% level from two weeks ago.
The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, was unchanged this week at 0.56%.
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 5.43%, up six basis points from last week’s 5.37%.