The municipal market was mostly unchanged Friday in fairly light activity.
“It could not be quieter,” said one trader in New York. “It’s a waste-of-a-good-shirt day. We saw a lot of issuance this week, and it will probably be more of the same next week, in terms of primary issuance.”
“It’s just been a long week. There have been a lot of new issues this week and it seems like the market is tired,” a second trader in New York said. “There’s not a lot of trading, with Treasuries off a little. It’s just a slow Friday.”
“There isn’t a whole lot trading,” a trader in San Francisco said. “People are just looking toward next week at this point. There is a pretty nice-sized new-issue calendar on the horizon, especially out here in Cal, so I think it’ll be more of the same, with a fairly light secondary, and eyes mostly on the primary.”
The Treasury market showed losses Friday. The yield on the benchmark 10-year note was quoted near the end of the session at 3.50% after opening at 3.41%. The yield on the two-year note was quoted near the end of the session at 1.02% after opening at 0.93%. The yield on the 30-year bond was quoted near the end of the session at 4.29% after opening at 4.24%.
Friday’s Municipal Market Data triple-A scale yielded 3.03% in 10 years and 3.73% in 20 years, matching levels of 3.03% and 3.73%, respectively, on Thursday. The scale yielded 4.08% in 30 years Friday, also matching Thursday’s level of 4.08%.
As of Thursday’s close, the triple-A muni scale in 10 years was at 88.6% of comparable Treasuries, according to MMD, while 30-year munis were 96.0% of comparable Treasuries. Thirty-year tax-exempt triple-A rated general obligation bonds were at 98.3% of the comparable London Interbank Offered Rate.
Trades reported by the Municipal Securities Rulemaking Board showed little movement. Bonds from an interdealer trade of California 5s of 2029 yielded 5.17%, even with where they traded Thursday. A dealer sold to a customer Texas Transportation Commission 5s of 2024 at 3.98%, even with where they were sold Thursday. A dealer sold to a customer insured New York City Municipal Water Finance Authority 5.625s of 2029 at 3.85%, even with where they were sold Thursday. Bonds from an interdealer trade of taxable New Jersey Turnpike Authority Build America Bonds 7.41s of 2040 yielded 5.94%, even with where they traded Thursday. A dealer sold to a customer University of Virginia 5s of 2040 at 4.16%, even with where they were sold Thursday.
A dealer sold to a customer Michigan Hospital Finance Authority 5.625s of 2029 at 5.73%, even with where they were sold Thursday. A dealer bought from a customer Georgia 5s of 2024 at 3.73%, even with where they traded Thursday. A dealer bought from a customer Arizona Health Facilities Authority 5.5s of 2038 at 4.75%, even with where they traded Thursday. Bonds from an interdealer trade of Charlotte, N.C., 5s of 2022 yielded 3.38%, even with where they were sold Thursday. A dealer sold to a customer Riverton, Utah, 5s of 2041 at 5.10%, even with where they traded Thursday.
In economic data released Friday, existing home sales surged 9.4% in September to a 5.57 million annual rate, the highest pace of sales in more than two years. Economists polled by Thomson Reuters expected existing homes to sell at a 5.35 million annual rate in September.
Activity in the new-issue market was light Friday.
Patrick McGee contributed to this column.
