Market Post: Munis Coast Into Weekend on Solid Footing

The tax-exempt market continued to trade steady on Friday as activity slowed as the weekend approached.

Overall for the week, traders said the new issue market handled a weaker tone fairly well.

“Deals are doing well this week despite the market being weaker,” a New York trader said. “Over, it’s driven almost entirely by the Treasury move.”

On Thursday, the 30-year Municipal Market Data yield rose one basis point to 3.01%. The 10-year was steady at 1.87% while the two-year closed at 0.29% for the 16th straight session.

Treasuries continued to gain Friday afternoon. The benchmark 10-year yield dropped two basis points to 1.82% while the 30-year yield fell three basis points each to 2.93%. The two-year was flat at 0.30%.

Looking to next week, the market can expect $5.98 billion to be issued, up from this week’s revised $4.76 billion. In negotiated deals, the market can expect $4.89 billion, up from this week’s revised $3.53 billion. On the competitive calendar, issuers will bring $1.09 billion, down from this week’s revised $1.23 billion.

In particular, Texas is expected to auction $9.8 billion of transportation and revenue anticipation notes, rated MIG-1 by Moody’s Investors Service, SP-1-plus by Standard & Poor’s, and F1-plus by Fitch Ratings.

“It’s the time of year for short-term borrowing,” a second New York trader said.