The municipal market finished unchanged and slightly firmer Friday amid light secondary-trading activity."We're mostly flat today, but there's even a bit of a firmer tone right now," a trader in New York said. "I don't know if it'll last, but for now, I'd still call it unchanged, though like I said, it feels a bit firmer than it has in recent days."
"There were definitely scattered patches of slight gains today, but on the whole, you can't really call it anything but flat," a trader in Los Angeles said. "I didn't really see nearly enough activity to move the scale. But there was certainly a bit of a firmer tone out there, it felt a little better, but to me, on the whole, it was just flat."
The Treasury market showed gains Friday. The yield on the benchmark 10-year note, which opened at 3.86%, was quoted near the end of the session at 3.80%. The yield on the two-year note was quoted near the end of the session at 1.28% after opening at 1.31%. The yield on the 30-year bond, which opened at 4.69%, was quoted near the end of the session at 4.64%.
As of Thursday's close, the triple-A muni scale in 10 years was at 87.5% of comparable Treasuries, according to Municipal Market Data. Additionally, 30-year munis were 101.3% of comparable Treasuries. Also, as of the close Thursday, 30-year tax-exempt triple-A general obligation bonds were at 106.0% of the comparable London Interbank Offered Rate.
In economic data released Friday, import prices rose 1.3% in May after a revised 1.1% gain the previous month. Economists polled by Thomson Reuters had predicted a 1.3% increase.
The University of Michigan's preliminary June consumer sentiment index reading was 69.0, compared to the May 68.7 reading. Economists polled by Thomson Reuters had predicted a 69.5 reading for the index.
Activity in the new-issue market was light Friday. However, this week a number of sizeable offerings will be priced in the primary market.
Leading the pack is a $1 billion sales tax revenue offering from Dallas Area Rapid Transit, which is slated to be priced by Siebert, Branford Shank & Co. tomorrow. The deal contains a $750 million series of taxable Build America Bonds, which consists of term bonds in 2034 and 2044. There will also be a $250 million tax-exempt portion maturing from 2014 to 2025. The credit is rated Aa3 by Moody's Investors Service and AAA by Standard & Poor's.
Also, Citi will price $750 million sale of taxable consolidated revenue bonds for the Port Authority of New York and New Jersey Thursday. The deal consists of three term bonds maturing in 2019 and totaling $150 million, in 2024 and totaling $250 million, and in 2029 totaling $350 million. The credit is rated Aa3 by Moody's and AA-minus by Standard & Poor's and Fitch Ratings.
