Yields of The Bond Buyer's weekly bond indexes posted increases this week, as the municipal market allowed supply and the government market to dictate price levels.
The 20-bond and 11-bond indexes of general obligation yields both increased five basis points to 6.34% and 6.25%, from 6.29% and 6.20%, respectively.
The 30-year revenue bond index rose two basis points to 6.51% from 6.49% last week.
The daily Bond Buyer Municipal Bond Index's average yield to maturity was up three basis points, to 6.43% from 6.40%.
The indexes have not been near these levels since July 1, when the 20-bond was at 6.38%, the 11-bond at 6.29%, and the revenue index reached 6.55%. However, that was the mid-point of an eight-week rise in bond prices. The streak ended July 30, when the general obligation bonds indexes hit 14-year lows.
Since a two-week price correction from Aug. 13 to Aug. 27, municipal bonds have traded in a tight range.
The 20-bond index reached a low of 6.16% on Sept. 10. The 20-bond index of 6.34% yesterday represented an 18 basis point differential from that date.
However, during the eight-week decline in yields, from May 28 to July 30, the 20-bond fell to 5.89% from 6.58%, a 69 basis point drop.
Supply has remained high. The Bond Buyer's 30-day visible supply has not been below $5 billion since Aug. 31, when it was $4.99 billion. in that same period, weekly sales have been under $3 billion only two times.
On Tuesday this week, the municipal market initially opened firmer as the Treasury market moved higher on the unyielding hopes of a Fed ease. However, by the afternoon municipal market players moved to the sidelines, allowing supply and governments to set the tone.
On Wednesday, $1.3 billion of California general obligation bonds came to market. Although the unsold balance was only $171 million at the end of the day, some market participants felt the issue was priced too aggressively. Some institutional investors did not buy the bonds, noting the price. But they said that when California comes to market later this year, they might step to the plate.
The BondBuyer's one-year note index rose 13 basis basis points, to 2.89% from last week's 2.76%.