The tax-exempt market opened with fewer bid lists than earlier in the week as the market had a quieter tone.
One New York trader said activity appeared to be focused on the short-end of the curve. "We are turning over the short, small pieces but I don't see as many bids-wanted as I did yesterday."
Thursday, yields on the Municipal Market Data scale ended as much as five basis points higher. The 10-year yield rose five basis points to 2.85% and the 30-year yield increased four basis points to 4.37%. The two-year finished flat at 0.43% for the 22nd consecutive session.
Yields on the Municipal Market Advisors scale ended as much as six basis points higher. The 10-year yield rose five basis points to 3.00% and the 30-year yield climbed four basis points to 4.46%. The two-year yield rose one basis point to 0.55%.
Treasuries were slightly weaker Friday morning. The two-year and benchmark 10-year yield rose one basis point each to 0.36% and 2.78%, respectively. The 30-year was steady at 3.81%.
In economic news, housing starts increased 5.9% to a seasonally adjusted annual rate of 896,000 in July, but fell short of the 903,000 expected by economists. Building permits rose 2.7% to a seasonally adjusted annual rate of 943,000, but also fell short of the 950,000 expected by economists.
"Though both housing starts and building permits rebounded in July and were close to forecasted levels, single-family activity was weaker than we were expecting," wrote economists at RDQ Economics. "Single-family housing starts are well above year-ago levels, but the small declines in both single-family starts and permits over the last three months are surprising to us given trends in homebuilder sentiment, home prices, and housing supply in relation to sales."
"Given the volatility, we tend to disregard month-to-month changes in multi-family housing starts," the economists wrote. "However, through the volatility, activity in the multi-family sector has been very strong this year which supports the construction sector and overall economic growth."
