The municipal market was slightly firmer Friday, following Treasuries.
"We're feeling alright today," a trader in Los Angeles said. "Whatever we may have lost yesterday came back today. I would say we're two or three basis points better."
Trades reported by the Municipal Securities Rulemaking Board Friday showed some gains. Bonds from an interdealer trade of insured New York City Municipal Water Finance Authority 5s yielded 4.35%, down three points from where they were sold Thursday. Bond from an interdealer trade of insured Indiana Municipal Power Agency 5s of 2042 yielded 5.07%, down a basis point from where they traded Thursday. Bonds from an interdealer trade of insured Texas 4.5s of 2030 yielded 4.76%, down a basis point from where they were Thursday. Bonds from an interdealer trade of insured Texas' Angleton Independent School District 4.625s of 2033 yielded 4.78%, down a basis point from where they traded Thursday.
The Treasury market also posted gains Friday. The yield on the benchmark 10-year Treasury note, which opened at 4.08%, finished at 4.05%. The yield on the two-year note was quoted near the end of the session at 2.65% after opening at 2.68%.
In economic data released Friday, personal income rose 0.2% in April, after a revised 0.4% uptick in March. Economists polled by IFR Markets predicted a 0.2% gain.
Personal consumption grew 0.2% in April after a 0.4% rise in March. Economists polled by IFR predicted a 0.2% increase.
The core personal consumption expenditures deflator climbed 0.1% in April, after a 0.2% rise the previous month. Economists polled by IFR had predicted a 0.1% gain.
The Chicago Purchasing Managers' business barometer rose to 49.1 in May from 48.3 in April. The data is compiled on a seasonally adjusted basis. An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion. Economists polled by IFR Markets predicted a 48.5 reading for the indicator.
The University of Michigan's final May consumer sentiment index reading was 59.8 compared to 59.5 earlier this month. Economists polled by IFR had predicted a 59.5 reading for the index.
A slate of economic data will be released this week, highlighted Friday by the release of the May non-farm payrolls report. In addition, April construction spending and the May Institute for Supply Management business activity composite index will be released today. April factory orders will be released tomorrow, followed by first-quarter non-farm productivity, first-quarter unit labor costs, and the ISM non-manufacturing index Wednesday. On Thursday, initial jobless claims for the week ended May 31 and continuing jobless claims for the week ended May 24 will be released, followed by April wholesale inventories and April wholesale sales Friday.
"There are three important numbers [this] week, and the especially important one is the final employment number," said Mike Moran, chief economist for Daiwa Securities. "The other two important ones are the ISM indexes with the manufacturing index [today] and the non-manufacturing one on Wednesday. Most people will be looking for that around 50.0 and, as you deviate from that, you'll get some moves in the market."
Economists polled by IFR Markets are predicting that 60,000 jobs were lost in May. They are also forecasting a 0.6% drop in construction spending, a 48.5 reading for the ISM index, a 0.1% drop in factory orders, a 0.9% gain in factory orders excluding transportation, a 2.5% annual rate for non-farm productivity, a 1.9% increase in unit labor costs, a 51.0 reading for the ISM non-manufacturing index, 374,000 initial jobless claims, 3.093 million continuing jobless claims, a 0.5% uptick in wholesale inventories, and a 0.5% rise in wholesale sales.
Activity in the new-issue market was light Friday.
