Market Post: Traders Rush to Complete Last-Minute Deals

NEW YORK - The tax-exempt market was busier than expected Tuesday morning as traders finalized last minute deals before breaking for a mid-week holiday on Wednesday. SIFMA recommends a 2 p.m. close Tuesday in the bond market.

"We are actually busy," a New York trader said.

Munis were steady Tuesday morning, according to the Municipal Market Data scale. On Monday, the 10-year yield fell one basis point to 1.85%. The two-year ended steady at 0.32% for the 22nd straight session while the 30-year yield finished flat at 3.16% for the seventh session.

Treasuries were weaker after a stronger session Monday. The benchmark 10-year yield rose two basis points to 1.61% while the 30-year yield jumped three basis points to 2.73%. The two-year was steady at 0.31%.

When looking at the yield curve, analysts at Loop Capital Markets say the eight- to 16-year portion of the curve looks relatively cheap. "Value is represented by the eight-, nine-, and 13-year spots," wrote Chris Mier, a strategist at Loop. "Severe underperformance by the 14-, 15-, and 16-year part of the curve over the last month suggests the potential for some mean reversion." He added the four-year spot is unusually rich.



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