The Bond Buyer’s weekly yield indexes declined this week, as strength during the early stages of the week held off weakness permeating the market during the last few sessions.
“The good days we were pretty much neutral, and the bad days we were down, so net, we’re down now,” said Fred Yosca, managing director and head of trading at BNY Capital Markets.
“The weight of the sinking Treasury market primarily was responsible, hurting the crossover ratio. Plus the market had run quite a bit last week. So there had to be some retrenchment after a rally.”
The municipal market was firmer by about three basis points Friday. Munis were then slightly firmer again Monday, in post-weekend light to moderate trading activity. And Tuesday, tax-exempt yields declined again, by one or two basis points, as a slew of new issuance hit the primary market, including three sizeable Build America Bonds deals.
But on Wednesday, munis did an about-face, with yields increasing about two or three basis points, partially reflecting a softness in Treasuries. And yesterday, the weaker tone continued, with yields rising another one or two basis points.
The Bond Buyer 20-bond index of 20-year general obligation bond yields declined three basis points this week to 4.68%. This is the lowest level for the index since May 28, when it was 4.61%.
The 11-bond index of higher-grade 20-year GO yields declined four basis points this week to 4.39%. This is the lowest the index has been since May 28, when it was 4.35%.
The revenue bond index, which measures 30-year revenue bond yields, declined four basis points this week, to 5.66%, which is its lowest level since June 4, when it was 5.63%.
The 10-year U.S. Treasury note yield rose 16 basis points this week to 3.57%. This is the highest yield for the 10-year note since June 18, when it was 3.85%.
The 30-year U.S. Treasury bond yield rose 14 basis points this week to 4.45%, which is the highest it has been since June 18, when it was 4.63%.
The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, declined nine basis points this week to 0.81%, but it remained above its 0.74% 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, declined four basis points this week to 5.55%, but it remained above its average for the week ended July 1, when it was 5.47%.