Market Post: Munis Lose Ground After Jobs Report

Following Friday’s better-than-expected June employment number, municipal bond yields jumped, following Treasuries.

While traders said there were not a lot of transactions, the trades that did occur were much weaker.

“It’s definitely weaker but just aren’t a lot of people around,” a Chicago trader said. “The general market is telling us it’s off a fair amount but the volume is light.”

This trader added in the high yield space, there have been only a handful of trades, but yields on those trades are up 12 to 13 basis points.

“With the mutual fund outflows there is a fair amount of money leaving these bonds and the jobs number came, and people are looking at whether or not the rally was a little overbought over the past couple days,” he said.

Munis followed Treasuries higher. The benchmark 10-year Treasury yield jumped 21 basis points to 2.72% and the 30-year yield increased 17 basis points to 3.67%. The two-year yield rose four basis points to 0.40%.

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.

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