The municipal market was active Wednesday morning ahead of the Federal Open Market Committee announcement in the afternoon.
Traders said the market stabilized after the recent rise in yields and the focus was on the short-end of the curve.
"Retail and institutional trades are seeing more activity today," a New York trader said. "They are actively trading mostly short stuff inside five and six years. It seems like there's a feeling the market has stabilized a bit after all the cuts."
Ahead of the FOMC announcement, the primary market should see a few new deals. RBC Capital Markets is expected to price for retail $350 million of New York's Metropolitan Transportation Authority revenue bonds, rated A2 by Moody's Investors Service and A by Standard & Poor's and Fitch Ratings. Institutional pricing is expected Thursday.
Tuesday, yields on the Municipal Market Data scale ended as much as four basis points higher. The 10-year yield increased one basis point to 2.24% and the 30-year yield rose three basis points to 3.53%. The two-year was steady at 0.31% for the fifth session.
Muni yields on the Municipal Market Advisors 5% scale closed as much as three basis points higher. The two-year and 10-year yields increased one basis point each to 0.39% and 2.34%, respectively. The 30-year yield rose two basis points to 3.64%.
Treasuries were stronger Wednesday morning. The benchmark 10-year yield slid one basis point to 2.18% and the 30-year yield fell three basis points to 3.32%. The two-year was steady at 0.27%.
