Yields on The Bond Buyer's weekly municipal bond indexes all fell this week, as investors, cheered by inflation figures and economic data, entered the market.

The yield on the 20-bond index of general obligation dropped 10 basis points, to 5.20% from 5.30% last Thursday. The 11-bond index also dropped 10 basis points, to 5.11% from 5.21%.

The 20-bond index is at the lowest level since Feb. 14, 1974, when it was at 5.18%, and the 11-bond index is at its lowest level since Feb. 21, 1974, when it was 5.09%.

The 30-year revenue bond index fell 11 basis points this week, to 5.41 % from 5.52% last week.

The average yield to maturity of the 40 bonds used to calculate the daily Municipal Bond Index fell six basis points, to 5.37% from 5.43% a week ago.

The revenue bond and the average yield to maturity of the 40 bonds used to calculate the bond index both reached new all-time lows.

Declining yields in the government market outpaced municipals this week, with the long Treasury bond dropping 16 basis points, to 5.84%.

Market players said this week's inflation figures helped push fixed income yields lower.

Yesterday, the producer price index for September was released, showing a 0.2% rise. The increase was in line with expectations, but more encouraging was the flat reading on core PPI, which excludes food and energy costs.

The Bond Buyer's 30-day visible supply dropped $1.7 billion Thursday to $4.43 billion from Wednesday's $6.13 billion. That is the measure of upcoming issuance's lowest level since Sept. 23, when it was $4.39 billion.

Standard & Poor's Corp.'s The Blue List had posted six consecutive days of declines dating from Oct. 5, when it was $2.01 billion, to Wednesday, Oct. 13 when it was $1.64 billion. Yesterday, it edged $55.5 million higher to $1.7 billion.

The Blue List has not been under $1.5 billion since Sept. 20, when it measured $1.498 billion.

The competitive component of the 30-day visible supply has not been under $2 billion since Sept. 30 when it was $1.84 billion and it has been accounting for a greater share of total forward supply.

The competitive component accounted for 45% of October's daily average supply, up from 39% in August and September and 30% for the January-July period.

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