Alert June 25, 2009

Bond Market Indicators

The yield on AAA-rated municipal bonds dropped slightly during the last month from 4.71% to 4.69% on 30-year bonds, but stayed level for 10-year bonds at 3.21%. During the same period, the yield on Treasuries rose from 4.08% to 4.53% on 30-year bonds and from 3.19% to 3.67% on 10-year notes, bringing the 10-year municipal-treasury yield ratio under 100% for the first time this year.

Source:
Bloomberg (www.bloomberg.com)

Some indicators relevant to the bond market improved slightly during the last couple of months. From April to May 2009, the consumer price index increased by 0.3% and existing home sales increased by 2.4%. Housing starts continued to slide, however, decreasing by 12.8% in April. Here are the official numbers:

Sources:
Unemployment Rate and Consumer Price Index: U.S. Bureau of Labor Statistics (www.bls.gov)
Existing Home Sales, New Homes Sales, and Housing Starts: National Association of Realtors (www.realtor.org)