The municipal market was unchanged yesterday, idling as participants awaited the conclusion of the trading year today.
“There’s really nothing happening,” a trader in New York said. “People have been out all week as it was, but there are even less people around today. There’s going to be pretty much nothing going on through tomorrow now. We’re totally flat.”
“We’re totally entrenched in the holiday doldrums now,” a trader in Los Angeles said. “You can hear a pin drop around here. There are a few trades getting done, but there’s hardly any activity, and there’s definitely no movement. We’re unchanged, and quiet, and that’s really it.”
The Treasury market was mixed yesterday. The yield on the benchmark 10-year note opened at 3.79% and was quoted near the end of the session at 3.79%. The yield on the two-year note opened at 1.08% and finished at 1.09%. The yield on the 30-year bond was quoted near the end of the session at 4.61% after opening at 4.64%.
The Treasury Department auctioned $32 billion of seven-year notes, with a 3 1/4% coupon, a 3.345% high yield, and a price of 99.41. The bid-to-cover ratio was 2.72.
Tenders at the high yield were allotted 55.69%. All competitive tenders at lower yields were accepted in full. The median yield was 3.290%. The low yield was 3.200%. Tenders totaled $86.91 billion and the Treasury accepted $32 billion, including $52 of million noncompetitive.
Federal Reserve banks bought $948.4 million for their own account in exchange for maturing securities.
Yesterday’s Municipal Market Data triple-A scale yielded 2.98% in 10 years and 3.68% in 20 years, matching Tuesday’s levels. The scale yielded 4.13% in 30 years yesterday, also matching Tuesday’s level.
As of Tuesday’s close, the triple-A muni scale in 10 years was at 77.4% of comparable Treasuries and 30-year munis were 88.1% of comparable Treasuries, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 91.6% of the comparable London Interbank Offered Rate.
The Municipal Securities Rulemaking Board reported 26,009 trades of 10,627 separate issues for volume of $5.68 billion Tuesday. Most active was Detroit City School District 7.747s of 2039, which traded 408 times at a high of 103.939 and a low of 99.628.
Trades reported by the MSRB yesterday showed little movement. A dealer sold to a customer taxable Riverside, Calif., Build America Bonds 6.125s of 2029 at 6.26%, even with where they were sold Tuesday. A dealer sold to a customer Georgia 5s of 2025 at 3.38%, even with where they were sold Tuesday.
Bonds from an interdealer trade of Nevada 5s of 2023 yielded 4.06%, even with where they were sold Tuesday. Bonds from an interdealer trade of taxable New York BABs 5.99s of 2036 yielded 6.11%, even with where they were sold Tuesday.
A dealer sold to a customer taxable insured Markham, Ill., BABs 8s of 2030 at 7.46%, even with where they were sold Tuesday.
Bonds from an interdealer trade of Clark County, Nev., 5s of 2028 yielded 4.53%, even with where they were sold Tuesday.
A dealer sold to a customer Texas 5s of 2037 at 4.33%, even with where they were sold Tuesday. A dealer bought from a customer California 5.5s of 2039 at 5.73%, even with where they were sold Tuesday.
A dealer bought from a customer insured Minnesota 5s of 2023 at 2.26%, even with where they were sold Tuesday. A dealer sold to a customer taxable Virginia College Building Authority BABs 5.4s of 2026 at 5.74%, even with where they were sold Tuesday.
A dealer sold to a customer taxable Detroit City School District BABs 7.747s of 2039 at 7.78%, even with where they were sold Tuesday.
Bonds from an interdealer trade of taxable New Orleans BABs 8.8s of 2039 yielded 8.29%, even with where they were sold Tuesday.
A dealer sold to a customer Tennessee 5s of 2029 at 3.69%, even with where they were sold Tuesday.
Bonds from an interdealer trade of Massachusetts Health and Educational Facilities Authority 5.25s of 2028 yielded 3.78%, even with where they were sold Tuesday. A dealer bought from a customer Utah 5s of 2022 at 3.25%, even with where they were sold Tuesday.
In economic data released yesterday, the Chicago Purchasing Managers’ Business Barometer rose to 60.0 in December from 56.1 in November. 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 Thomson Reuters predicted a 55.0 reading for the indicator.
In the new-issue market yesterday, Lawrence County, Tenn., competitively sold $4.9 million of Series 2010 general obligation school refunding and improvement bonds to Ross Sinclaire & Associates LLC, with a true interest cost of 3.70%.
The bonds mature from 2010 through 2018, and in 2020, 2023, 2026, 2030, and 2034.
The bonds yield 1.15%, 1.35%, 1.65%, and 2.00% from 2011 through 2014, respectively, all with 2% coupons; 2.50% priced at par in 2015; 2.65% and 2.90% with 3% coupons in 2016 and 2017, respectively; 3.50% priced at par in 2020; and 3.90% with a 4% coupon in 2023.
Bonds maturing in 2010, 2018, 2026, 2030, and 2034 were not formally re-offered.
The bonds, which are callable at par at 2020, are rated A-plus by Standard & Poor’s.
There were four losing bids on the Lawrence County bonds: Vining-Sparks IBG with a TIC of 3.78%; Morgan Keegan & Co. with a TIC of 3.82%; a syndicate led by UBS Financial Services with a TIC of 4.08%; and Wells Fargo Advisors with a TIC of 4.09%.
