The municipal market was unchanged to slightly weaker Friday amid fairly light secondary trading activity.
“There’s some weakness out long, but it’s been pretty quiet for the most part,” a trader in Los Angeles said. “I’d say we’re down maybe a basis point or two on the long end, and flat inside of that. There’s not a ton trading, but there are some deals getting done.”
Dan Solender, director of municipal bond management at Lord Abbett, said that he has observed plenty of demand at the right yields.
“The retail interest is definitely there,” he said.
The Municipal Market Data triple-A scale yielded 2.83% in 10 years Friday, unchanged from Thursday, while the 20-year scale yielded 4.02%, up two basis points. The scale for 30-year debt also rose two basis points to 4.36% from 4.34%.
Friday’s triple-A muni scale in 10 years was at 93.4% of comparable Treasuries and 30-year munis were at 101.2%, according to MMD. Meanwhile, 30-year tax-exempt triple-A general obligation bonds were at 108.2% of the comparable London Interbank Offered Rate.
The Treasury market was somewhat weaker Friday. The benchmark 10-year note finished at 3.02% after opening at 2.98%. The 30-year bond finished at 4.32% after opening at 4.25%. The two-year note finished at 0.49% after opening at 0.54%.
In economic data released Friday, total nonfarm payrolls expanded more slowly in November than expected, rising by 39,000 jobs as the unemployment rate climbed to 9.8%.
Private payrolls added 50,000 and government payrolls dropped by 11,000. Economists expected nonfarm payrolls to grow 138,000, private payrolls to rise 140,000, and the unemployment rate to hold steady at 9.6%, according to the median estimate from Thomson Reuters.
Factory orders fell 0.9% at a seasonally adjusted rate in October, the Commerce Department reported Friday. Orders excluding transportation slipped 0.2% for the month.
Economists expected a 0.7% decline in factory orders. Orders for September were revised higher to a 3.0% rise. September orders excluding transportation were revised to a 1.3% gain.
The Institute for Supply Management’s non-manufacturing business activity composite index rose to 55.0 in November from 54.3 in October. Economists polled by Thomson Reuters had expected a 54.9 level for the seasonally adjusted gauge of the services sector. Readings below 50 signal a slowing economy and those above 50 indicate expansion.
