The tax-exempt market traded steady to slightly weaker Thursday morning as balances left over from primary deals resurfaced in the market.
"There is not a whole lot going on," a New York trader said. "We are seeing some of the new issues that didn't sell all their balances come into the market," adding names like Orange County and New York's Port Authority are trading.
"There weren't a ton of balances left but enough that there are some offerings," the trader added. "Some of the deals came cheap because the market was selling off about two weeks ago and it has since pounded back so a lot of customers are flipping those bonds now and coming back into the street."
Overall, he added the market is one to two basis points cheaper Thursday morning.
In the primary market, Stifel Nicolaus & Co. should price $265 million of California's Alameda Corridor Transportation Authority refunding bonds, rated A3 by Moody's Investors Service and A by Fitch Ratings.
JPMorgan is expected to price $139.4 million of taxable Milwaukee County, Wis., general obligation pension promissory notes, rated Aa2 by Moody's, AA by Standard & Poor's, and AA-plus by Fitch.
Goldman, Sachs & Co. is expected to price $107.7 million of JEA Electric System revenue bonds, rated Aa2 by Moody's, AA-minus by Standard & Poor's and AA by Fitch.
The Municipal Market Data scale ended mostly steady Wednesday after closing flat on Tuesday. The 10-year and 30-year yields finished steady for the fourth session at 1.67% and 2.72%, respectively. The two-year finished steady at 0.33% for the fifth session.
Treasuries were weaker Thursday morning after a mostly steady session Wednesday. The benchmark 10-year yield and the 30-year yield rose two basis points each to 1.86% and 3.05%, respectively. The two-year was steady at 0.25%.
In economic news, initial jobless claims fell 5,000 to 330,000 in the week ending Jan. 19, falling to its lowest level in five years. Economists expected 364,000 claims.
"Turn of the year volatility in jobless claims is not unusual and it can be augmented by outdated seasonal adjustment factors," wrote economists at RDQ Economics. "As a result, we would caution against reading too much into the recent decline in claims. At this point, we would put no more weight on claims than to say that they do not suggest layoffs have risen early in 2013."
