The tax-exempt market was stronger Tuesday afternoon, following Treasuries, as traders said demand outweighed supply.
"The market is stronger at least by three basis points," a Chicago trader said. "Maybe stronger by three to five basis points in the 10-year range."
He added there is not enough going on in the primary Tuesday, and so all the focus is on the secondary. "It's all secondary today. And probably primary Wednesday and Thursday."
And with Thanksgiving cutting next week's calendar short, traders have to buy this week. "If you're going to buy anything, you have to buy it now because it won't come next week. And there is an absence of paper in the secondary so you have to pay up."
In the primary market this week, $7.61 billion is expected, up from last week's revised $4.65 billion. The negotiated market can expect $6.63 million, up from last week's revised $3.69 billion. On the competitive calendar, the market can expect $985 million, up from last week's revised $965 million.
On Tuesday, Jefferies & Co. priced $209.8 million of Harris County, Texas, taxable and tax-exempt bonds, rated triple-A. Pricing details were not available by press time.
Goldman, Sachs & Co. priced $58.5 million of North Carolina Medical Care Commission facilities revenue refunding bonds for the Wake Forest Baptist Obligated Group, rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's. Pricing information was not yet available.
On Friday, the Municipal Market Data scale posted gains for the fifth consecutive session and record low yields were set. The 10-year yield dropped two basis points to 1.57%, setting a new low as recorded by MMD. The 1.57% beat the previous record of 1.59% set Thursday. Before that, the record low was 1.60% set July 26.
The 30-year MMD yield fell three basis points to 2.66%, also setting a record low as recorded by MMD. The 2.66% beat the previous record of 2.69% set Thursday and the 2.74% record set Wednesday. Before this week, the record was a 2.79% set July 25.
The two-year finished steady at 0.30% for the 32nd consecutive trading session.
Treasuries were stronger Tuesday afternoon but had given up some of the morning gains. The benchmark 10-year yield fell two basis points to 1.60% while the 30-year yield dropped three basis points to 2.73%. The two-year yield fell one basis point to 0.25%.