(Corrects to trillion from billion in first paragraph)
NEW YORK Aug 6 In the $3.7 trillion U.S.
municipal bond market, the largest price movements take place on
Tuesdays when traders are preparing portfolios for new bond
sales, according to recent research by Municipal Market data.
Price movements in municipal bond prices are on average
larger on Tuesday than on any other day of the week, said Daniel
Berger, analyst at MMD, a unit of Thomson Reuters.
Considering a data set of more than six years, Berger showed
that on average yields, which move inversely to prices, have
increased or decreased the most on Tuesdays in 44 percent of
cases. In the remaining cases the highest movements were spread
out among other days of the week, with higher concentrations on
Mondays and Fridays.
"In bull markets buying on Tuesday morning will lead to
underperformance, while in bear markets Tuesday bond purchasers
should experience outperformance," Berger said. He said hedge
funds and others can create buying programs to take advantage of
(Reporting by Tiziana Barghini)