MSRB adds hourly BVAL AAA yield curve updates to EMMA

The Municipal Securities Rulemaking Board now includes hourly updates from Bloomberg’s BVAL AAA Municipal Curve on its EMMA online system, a move the board says seeks to enhance transparency for investors, issuers and market participants.

The updated site now shows BVAL AAA Municipal Curve updates hourly between 9 a.m. and 4 p.m. eastern, in addition to displaying monthly data points. 

“The launch of this enhanced yield curve on EMMA represents a significant improvement in market transparency for investors, issuers and all market participants who now have free access to intra-day price movements in the $4 trillion municipal securities market for the very first time,” said MSRB chief executive officer Mark Kim.

The move changes EMMA’s usual practice of displaying yield curve data from the day before.

“The MSRB’s EMMA website brings together data, documents and tools to facilitate decision-making in the municipal market,” said John Bagley, MSRB chief market structure officer. “Previously, yield curves available on EMMA reflected data from the day before. With EMMA’s new enhancements, the website now displays timelier pricing from BVAL’s AAA Municipal Curve.”

The board has displayed yield curves and indices on EMMA since 2017, though its review of yield curve indexes for the sake of added transparency became a mission of the MSRB’s since 2012.

The MSRB currently posts Bloomberg’s BVAL AAA Municipal Curve, BondWave AA QCurve, ICE US Municipal AAA Curve, the S&P Global Market Intelligence (formerly IHS Markit) Municipal Bond AAA Curve, MBIS Municipal Benchmark Curve, and the S&P Municipal Bond Index, in addition to Treasury Yield Curve Rates.

“These newest enhancements to the EMMA website will help investors monitor municipal bond interest rates and movement throughout the day, fostering greater market transparency,” a Bloomberg spokesperson said. “Bloomberg’s BVAL AAA Municipal Curve is designed to provide granularity backed by a methodical approach using trades and contributed sources to reflect timely movement in the municipal market.”

The MSRB said it welcomes the addition of other curves as well.

“We welcome opportunities to make additional yield curves available to investors for free on EMMA, along with accompanying documentation on methodology,” the MSRB said. “Yield curve providers have no obligation to provide their curves on EMMA, but some have chosen to make them freely available to enhance market transparency.” 

Market participants welcomed the advancements but with some degree of caution.

“PFM applauds the MSRB for publishing a fully interpolated benchmark curve, said Todd Fraizer, Managing Director and Head of PFM Pricing Group, PFM Financial Advisors LLC. “A publicly available benchmark accessible to all municipal market participants will be welcomed. U.S Treasury, SOFR and SIFMA benchmarks are all publicly available. We are excited that all market participants, particularly issuers and smaller investors, will now have direct access to tax-exempt fixed-rate benchmark data.”

“We find the BVAL AAA Callable curve offers transparency and timeliness, by displaying how market observations and submitter data are moving the benchmark throughout the day,” Frazier said.

The move “is consistent with the muni industry’s gradual move toward real-time curves, driven by increasing algorithmic and automated bidding strategies,” said Triet Nguyen, vice president of Strategic Data Operations. It would also help in the development and/or enhancement of pre-trade transparency trading tools, he said.

“While this is certainly of great interest to professional traders, I’m not sure how this will directly benefit individual investors, which presumably is the audience the MSRB has in mind,” Nguyen said. “That said, more timely information is always better than day-old information, even for retail investors.”