Most of The Bond Buyer’s weekly yield indexes rose this week, as several weeks of permeating market firmness began to reverse and some weakness appeared.
“It’s full speed ahead until you run into a brick wall, but guess what just happened, beginning two or three days ago?” said Fred Yosca, managing director and head of trading at BNY Capital Markets Mellon. “There’s absolutely nobody buying any bonds, and there’s a bunch of dealers sitting around wishing somebody would, and hoping someone will relieve them of some inventory. So you’ve seen a lot of bid-wanteds, and very little support on the bid side. The market got so high it was completely unsupportable, and we were overdue for a correction, and it may be upon us.”
Leading the new-issue market this week, California yesterday sold $4.125 billion of taxable, tax-exempt, and Build America Bonds.
The Bond Buyer 20-bond index of 20-year general obligation bond yields rose 12 basis points this week to 4.06%, the highest level for the index since Sept. 17, when it was 4.20%. It was the first increase for the index in 12 weeks.
The 11-bond index of higher-grade 20-year GO yields rose 11 basis points this week to 3.80%, the highest level since Sept. 17, when it was 3.93%. This was the first time in 10 weeks that the index had risen.
The revenue bond index, which measures 30-year revenue bond yields, was unchanged this week at 4.69%, which is the lowest it has been since Jan. 17, 2008, when it was 4.63%.
The 10-year Treasury note yield rose four basis points this week to 3.24%, but it remained well below its 3.38% level from two weeks ago.
The 30-year Treasury bond increased 11 basis points this week to 4.08%, but still remained below its 4.17% 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 0.59%, which is the highest it has been since Sept. 16, when it was 0.60%. The index had been at its all-time low of 0.56% for the past two weeks.
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 4.96%, down two basis points from last week’s 4.98%.