With most municipal bond traders still on vacation for the Fourth of July holiday, muni trading was quiet even as Treasury yields jumped on better-than-expected June employment numbers.
June payrolls rose 195,000 while April and May revisions were up 70,000. June unemployment rate stayed at 7.6%.
"This is a stronger-than-expected jobs report that further confirms the U.S. labor market is experiencing a sustained improvement in job creation," wrote economists at RDQ Economics. "The three-month trend in job creation is close to 200,000 per month and the 12-month average is not far away from that. "We would appear to be one step closer to the Fed tapering its bond purchases, which we still see as being announced at the September FOMC meeting."
Treasury yields jumped on the news. The benchmark 10-year yield jumped 18 basis points to 2.69% and the 30-year yield spiked up 15 basis points to 3.65%. The two-year yield increased three basis points to 0.39%.
Munis didn't react. "There's nothing going on and no one is out there," a New York trader said. "There are not much offerings or bids wanted."
Wednesday, yields on the Municipal Market Data scale ended mostly unchanged across the curve. The 10-year and 30-year yields were steady for the fifth session at 2.56% and 3.83%, respectively. The two-year was flat at 0.50% for the sixth session.
Yields on the Municipal Market Advisors scale ended mostly flat as well Wednesday. The 10-year yield slipped one basis point to 2.72%. The 30-year yield was unchanged at 3.95% for the fourth session and the two-year was steady at 0.53% for the fifth session.
