With little supply in the new issue market Thursday, municipal bonds traded a few basis points stronger, decoupling from a Treasury selloff.
Traders in the tax-exempt market said the primary calendar was light and there was little activity in the secondary, but the few trades that did cross looked stronger. "It has probably ticked up a few basis points here and there and moved opposite with Treasuries," a Los Angeles trader said. "And that has to do with no supply."
He added the secondary market was quiet. "It has been that way for a few days or maybe even a week."
In the only major deal to price Thursday, Bank of America Merrill Lynch won the bid for $189.1 million of Oyster Bay, N.Y., bond anticipation notes, rated SP-1 by Standard & Poor's. The bonds yielded 0.65% with a 5% coupon in 2014.
Wednesday, yields on the Municipal Market Data scale ended flat. The 10-year and 30-year yields were steady at 2.67% and 4.20%, respectively. The two-year finished flat at 0.43% for the 11th consecutive session.
Yields on the Municipal Market Advisors scale ended as much as one basis point weaker Wednesday. The 10-year and 30-year yields rose one basis point each to 2.88% and 4.28%, respectively. The two-year was steady at 0.54% for the sixth session.
Treasuries continued to drift lower, with yields rising Thursday afternoon. The benchmark 10-year yield jumped 12 basis points to 2.70% and the 30-year yield increased 11 basis points to 3.75%. The two-year yield rose one basis point to 0.33%.
For the week ending July 31, activity in retail trades of under 100 bonds fell for the third consecutive week, according to BondDesk Group.
The number of investor buy trades slipped to 84,761 from 86,805 the week ending July 24. It dropped from 90,078 the week ending July 17. The number of investor sell trades also slipped to 38,923 from 40,245 the week before. Sell trades dropped from 41,016 the week ending July 17. The ratio of buy-to-sell trades stayed at 2.2 for the third consecutive week.
Par value traded also fell for the third straight week. Buy trades fell to $2.213 billion from $2.248 billion the week before. It also slipped from $2.318 billion the week ending July 17. Par value of investor sell trades fell to $1.039 billion from $1.056 billion. It continued its slide from $1.078 billion in the week ending July 17. The ratio of buy-to-sell trades in dollar amount remained at 2.1 for the second week.
