Municipal market participants face a full day of deals, but stronger than anticipated economic news and weaker Treasuries have led to light activity in the secondary market to start the day.
"It seems like everyone's trying to focus on the deals, and there are a lot coming in today," a trader in New York said. "It doesn't seem there's a whole lot of secondary activity. Accounts are really focused on the primary. There's not much to talk about in our space - that's seven years and in."
Headlines from struggling municipalities
The Commerce Department reported Thursday that gross domestic product numbers showed a larger-than-expected upward adjustment, to 3.6% growth, representing a 0.8-point improvement from the preliminary report and greater than average revision.
Additionally, the Department of Labor Initial reported that unemployment claims decreased 23,000 during the Nov. 30 Thanksgiving holiday week to 298,000.
The department claims analyst said the latest reading should be taken with caution as weekly readings demonstrate more volatility than normal, making seasonally adjusting claims around a major holiday difficult to measure.
The market is eager for new paper, though, as it anticipates large deals such as the institutional pricing of $1.2 billion of New York tobacco settlement bonds, $488.9 million of Washington, D.C., general obligation bonds and $486 million of Delaware River Port Authority revenue bonds.
Yields on the Municipal Market Data triple-A scale appeared up to two basis points higher past eight years on the curve to start Thursday. Bonds maturing between 11 and 25 years appeared weakest.
The benchmark triple-A 10-year yield on Wednesday rose five basis points to 2.73%. The 30-year also climbed five basis points to 4.19%. The two-year held at 0.33% for the 14th straight session.
Yields on the Municipal Market Advisors benchmark triple-A scale ended Wednesday higher through the curve from four years out. The 10-year climbed four basis points to 2.76%. The 30-year yield rose three basis points to 4.41%. The two-year held at 0.37%.
Treasuries started Thursday weaker, continuing their trajectory for the week. The benchmark 10-year yield has increased three basis points to 2.86%, while the 30-year yield has inched up one basis point to 3.91%. The two-year has ticked up two basis points to 0.31%.
