Meanwhile, yields on top-rated 10-year municipal bonds dipped 3 basis points to 2.47% while those on some longer-dated securities experienced a 4 basis point drop, Bloomberg reports. Bond yields and bond prices have an inverse relationship, so a falling yield corresponds with rising prices.
Muni Debt Yields Strengthen
The move also comes after municipal debt yields strengthened relative to Treasuries last week, which has made muni debt more attractive in comparison.
“Munis underperformed across the curve and looked cheaper,” Peter Block, managing director at Ramirez & Co., told Bloomberg. “Supply is low this week, there’s a lot of money on the sidelines and we looked attractive.”
John Donaldson, director of fixed income at the Haverford Trust Co., argued that demand for tax-exempt income remains solid while supply remains muted, The Bond Buyer reports.
“The municipal market continues to feel the impact from so much of the new issue supply being rushed into the fourth quarter of 2017,” Donaldson told The Bond Buyer. “We continue to see better value from new issue pricing as there is little selling pressure in the secondary market.”
For more information on the munis market, visit our municipal bonds category.