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Market Post: Markets Quiet as Trading Desks Empty

The tax-exempt market was unsurprisingly extremely slow Monday morning as most traders were either working from home or not working at all on this Christmas Eve.

"There is nothing going on and to have a report would be very misleading," a New Jersey trader said. "No one is in. When people reach out offering wise, half the people aren't in. Maybe they are working from Bloomberg [terminal] remotely, if that."

SIFMA recommends an early close for bond markets Monday at 2 p.m., Eastern, and a full close Tuesday for the Christmas holiday.

Trading was extremely slow Monday and that is expected to carry on for the rest of the week. In the primary market this week, only $2 million is expected to come to market, down from last week's revised $3.14 billion. All $2 million of new issuance will come in the competitive market, down from last week's revised $879 million in competitive offerings. No negotiated deals are expected this week, and that is down significantly from last week's revised $2.26 billion in negotiated deals.

On Friday, the Municipal Market Data scale ended firmer for the second session. The 10-year yield fell two basis points to 1.77% while the 30-year yield dropped one basis point to 2.83%. The two-year finished flat at 0.31% for the fourth consecutive trading session.

Despite the small gains at the end of last week, the 10-year MMD yield is still up 11 basis points for the week and remains 30 basis points above its record low of 1.47% set Nov. 28. The 30-year is still trading 12 basis points higher for the week and is 36 basis points above its record low of 2.47% also set Nov. 28.

Treasuries were mostly steady Monday morning. The two-year and benchmark 10-year yields were steady at 0.27% and 1.77%, respectively. The 30-year yield increased one basis point to 2.94%.

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