Nearly all The Bond Buyer’s weekly yield indexes rose slightly as an influx of new-issue supply weighed on municipals.
“It looks like the market is in the midst of a slow bleed lower,” said Michael Pietronico, chief executive officer at Miller Tabak Asset Management. “Too much supply is coming too fast to absorb.”
“Fundamentally speaking, though, this is a unique supply story for munis,”he said of the abundance of new issues. “It’s probably a good time to be looking to buy.”
In the new-issue market this week, Bank of America Merrill Lynch priced $729.4 million of taxable BABs for Dallas Area Rapid Transit, Morgan Stanley priced $500 million of taxable BABs for the Salt River Project Agricultural Improvement and Power District in Arizona, and New York’s Empire State Development Corp. competitively sold $467.3 million of revenue refunding bonds to Citi.
The Bond Buyer 20-bond index of 20-year general obligation bond yields rose one basis point this week to 3.84%, but remained below the 3.89% level from two weeks ago.
The 11-Bond GO index of higher-grade 20-year GO yields increased two basis points this week to 3.59%, but still fell below the 3.63% level from two weeks ago.
The revenue bond index, which measures 30-year revenue bond yields, gained one basis point this week to 4.59%. That was still below its 4.63% level from two weeks ago.
The Bond Buyer one-year note index, which is based on one-year tax-exempt note yields, rose one basis point this week to 0.44%, but still remained below its 0.46% level from two weeks ago.
The yield on the 10-year Treasury note declined four basis points this week to 2.52%. This is the lowest the yield has been since Aug. 26, when it was 2.50%.
The yield on the 30-year Treasury bond fell five basis points this week to 3.69%, which is its lowest level since Aug. 26, when it was 3.53%.
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, dropped two basis points this week to 4.87%. That is the lowest weekly average for the yield to maturity since the week ended Sept. 2, when it was also 4.87%.