The municipal market was unchanged Friday amid fairly light secondary trading activity and ahead of a long weekend in observance of the July 4 holiday.
“It’s very quiet,” a trader in New York said. “There’s very little going on. Just minor retail-type trading, otherwise pretty much everyone has gone for the day. There’s not much trading at all. Next week should be firm, there is no reason to go down at this point. It will be a lighter week as far as new issues are concerned.”
“There are not enough people in,” a trader in San Francisco said. “The market is shaky right now. If you have unemployment on a Friday on the Fourth of July weekend, you can’t really get a read of what’s going on. I don’t expect it to change too much next week.”
The Treasury market mostly showed some losses Friday. The benchmark 10-year note was quoted near the end of the session at 2.97% after opening at 2.95%. The 30-year bond was quoted near the end of the session at 3.93% after opening at 3.89%. The two-year note was quoted near the end of the session at 0.63% after opening at 0.62%.
The Municipal Market Data triple-A scale yielded 2.76% in 10 years and 3.72% in 20 years Friday, following levels of 2.76% and 3.73% on Thursday. The scale yielded 4.00% in 30 years Friday, following 4.01% on Thursday.
Thursday’s triple-A muni scale in 10 years was at 94.9% of comparable Treasuries and 30-year munis were at 103.1%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 108.4% of the comparable London Interbank Offered Rate.
Trades reported by the Municipal Securities Rulemaking Board Friday showed little movement. Bonds from an interdealer trade of insured Dormitory Authority of the State of New York 5.25s of 2031 yielded 3.60%, even with where they were sold Thursday. A dealer sold to a customer taxable Alexandria, Va., 5s of 2030 at 5.10%, even with where they were sold Thursday.
A dealer sold to a customer Illinois Finance Authority 5s of 2037 at 5.12%, even with where they were sold Thursday. A dealer bought from a customer taxable Connecticut Build America Bonds 5.63s of 2029 at 4.86%, even with where they were sold Thursday.
A dealer sold to a customer taxable Hidalgo County, Tex., BABs 5.32s of 2024 at 5.03%, even with where they were sold Thursday. Bonds from an interdealer trade of Des Moines 4s of 2027 at 3.94%, even with where they were sold Thursday.
In economic data released Friday, nonfarm payrolls dropped by 125,000 in June and private nonfarm payrolls increased by 83,000 as the federal government wound down temporary employment for the 2010 Census.
The unemployment rate fell to 9.5, the lowest level in 11 months.
Payroll employment for the 2010 Census fell by 225,000, pushing total payrolls negative for the first time since December. Through the first six months of 2010, private sector employment has increased by 593,000.
Nonfarm payrolls were revised higher for May to an increase of 433,000 from 431,000 and for April to 313,000 from 290,000. In the private sector, May’s payrolls were revised lower to 33,000 from 41,000 reported last month. April’s private sector was revised higher to 241,000 from 218,000.
Economists polled by Thomson Reuters expected nonfarm payrolls would decrease by 110,000 and for the unemployment rate to increase to 9.8%, according to the median estimate.
Factory orders fell 1.4% in May, more than double economists’ estimates and the first decline in nine months.
Orders excluding transportation fell 0.6%, the second consecutive monthly decline and durable goods orders dropped 0.6%.
Economists expected factory orders would decrease 0.5% for the month, according to the median estimate from Thomson Reuters.
Priti Patnaik contributed to this column.
