Muni Yields Rise Amid Mixed Econ Data

Municipal yields rose Wednesday morning as mixed economic data were released.

Yields for 13-to 30-year maturities increased by as much as two basis points, and 12-year maturities rose up to one basis point.

"I think the economic data number that came in this week, came in mixed," a trader in Chicago said. "Housing was a little weaker than expected."

Housing starts did rise in March to 946,000 from 907,000 in February, but did not beat market expectations of 965,000. Housing permits decreased in March from February dropping to 990,000 from February's 1,018,000.

The trader in Chicago said that even if housing data strengthens, it will have only a limited effect on munis.

"I think a lot of the refinancing has already come through the marketplace, so any stimulation from the housing refinancing has already happened," the trader in Chicago said. "The housing market this year will be mediocre at best, especially since rates are higher this year."

Tuesday's Consumer Price Index release indicated that inflation firmed in March from February, going up to 1.5% in March compared to 1.1% in February.

"I think the market took the inflation number in stride," the trader in Chicago said. "If anything treasuries were a little stronger yesterday."

In the negotiated market, Raymond James & Associates Inc. will issue $197.5 million of revenue and refunding bonds for the New Jersey Educational Facilities Authority Wednesday. The bonds mature serially from 2015 through 2033 and are rated A1 by Moody's Investors Service, A by Standard & Poor's and A-plus by Fitch Ratings.

The largest deal of the week in the competitive market will be issued Wednesday by North Carolina for $321.1 million of general obligation bonds. The deal is rated AAA by all rating agencies.

Citigroup Global Markets won the bid for $150 million of consolidated public improvement bonds for Maryland's Washington Suburban Sanitary Ddistrict Tuesday. Yields ranged from 0.10% with a 5% coupon maturing in 2015 to 3.76% with a 4% coupon in 2044.The bonds are callable at par in 2024 and are rated Aaa by Moody's and AAA by S&P and Fitch.

Treasuries weakened Wednesday morning, with the 10-year benchmark and the two-year notes rising two basis points each to 2.65% and 0.39%, respectively. The 30-year yields rose three basis points to 3.49%.

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