Market Post: Munis Extend Gains Ahead of NYC Sale

The tax-exempt market opened Monday morning on a stronger note for the ninth consecutive session as traders said the market felt about one basis point stronger.

"It's one to two basis points stronger from Friday," a New York City trader said. "It's firm but quiet. It's a typical Monday."

The 10-year spot of the curve traded one basis point firmer, this trader said, though there was a fair amount of business on longer-maturing bonds as well.

Traders also wait for nearly $500 million of New York City general obligation bonds to price for retail investors later Monday. Siebert Brandford Shank & Co. is pricing the bonds, rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings. A second retail order period will be held Tuesday followed by institutional pricing Wednesday. The deal consists of three series of that are all tax-exempt. The city on Wednesday will also issue a separate taxable competitive deal totaling $125 million.

The New York City deal is one of the largest deals in a week that should see relatively light issuance. The market can expect $4.02 billion in new deals, down from last week's revised $4.80 billion, according to Ipreo and The Bond Buyer. In negotiated deals, $3.41 billion is expected along with $608.1 million in competitive sales.

On Friday, yields on the triple-A Municipal Market Data scale ended as much as three basis points lower. The 10-year yield fell one basis point to 2.60% and the 30-year yield dropped three basis points to 4.20%. The two-year yield fell two basis points to 0.36%.

Yields on the Municipal Market Advisors scale also ended as much as three basis points lower. The 10-year yield fell two basis points to 2.75%. The two-year and 30-year yields were flat at 0.54% and 4.31%, respectively.

Treasuries were stronger for a second session Monday. The benchmark 10-year yield slid one basis point to 2.73% and the 30-year yield fell two basis points to 3.75%. The two-year was steady at 0.34%.

For reprint and licensing requests for this article, click here.
MORE FROM BOND BUYER