The Bond Buyer’s weekly yield indexes mostly declined this week, as a firmness permeated the market through each session.
“You still have a fair amount of cash available for tax-exempt purchasing due to coupon payments that were received in the first part of July, versus the relatively low supply,” said Howard Mackey, president of the broker-dealer division of Rice Financial Products. “So those have been some of the major factors that have kept muni prices high. Yields are at relatively low levels.”
Mackey also noted that deals like Wednesday’s $505 million Miami-Dade County issue and Tuesday’s $446.2 million Metropolitan Washington Airports Authority sale were “well received.”
“That basically tells you that the market has a fairly strong appetite for tax-exempt paper, particularly given the fact that BABs have had somewhat of a crowding-out effect vis-à-vis tax-exempts since the beginning of the year,” Mackey noted.
The Bond Buyer 20-bond index of 20-year general obligation bond yields declined 11 basis points this week to 4.26%. That is the lowest the index has been since Dec. 30, 2009, when it was 4.25%.
The 11-bond index of higher-grade 20-year GO yields dropped 12 basis points this week to 3.97%, which is the lowest level for the index since Dec. 30, 2009, when it was also 3.97%.
The revenue bond index, which measures 30-year revenue bond yields, rose one basis point to 4.78%, but it remained below its 4.79% level from two weeks ago.
The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, rose three basis points this week to 0.54%, but is still below its 0.59% level from two weeks ago.
The yield on the 10-year Treasury note fell five basis points this week to 2.93%. This is the lowest the yield has been since April 23, 2009, when it was also 2.93%.
The yield on the 30-year Treasury bond dropped two basis points this week to 3.95%, which is its lowest level since July 1, when it was 3.88%.
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, decreased one basis point this week to 5.12%.
Priti Patnaik contributed to this column.