Municipals were steady Monday ahead of the Federal Open Market Committee meeting, while U.S. Treasury yields rose as investors considered the stability of the banking sector. Equities ended up. Triple-A benchmarks were little changed, no more than a basis point or two, while U.S. Treasury yields rose five to 12 basis points. … The banking sector crisis, which erupted with the collapse of Silicon Valley Bank and resurfaced with the struggles of Credit Suisse, sent USTs on a flight-to-quality bid last week. “The two-year plummeted by well over 100 basis points [since March 8], after the short benchmark attained a multiyear high of 5.08% during [Federal Reserve Board] Chair [Jerome] Powell’s semi-annual testimony,” said Jeff Lipton, managing director of credit research at Oppenheimer Inc. Munis joined “the flight-to-quality bandwagon with 10- and 30-year AAA benchmark yields dropping by 23 and 16 basis points respectively,” he said. “Price advances have been more pronounced on the short-end of the muni curve as yields on the one- and two-year tenors declined by 40 and 39 basis points respectively,” he noted.
Source: The Bond Buyer
