A municipal market that traders describe as quietly firm awaits the arrival of the week's new-issue calendar.
Market participants are finding increasingly
"Everyone's looking for paper, buying stuff tight," he said. "Even a big supply week wouldn't matter now. It wouldn't cheapen things up. It might keep it subdued. But I don't think a big supply week or two's going to spook [the market] right now."
Investors have more money to spend on munis. Roughly $30 billion in coupon payments have poured in to the market to pick among about $7 billion in new deals so far this year.
Retail investors have generated more activity among the scramble, the trader said.
"You still see 3%-to-4% coupons trading tight," he said. Retail's in the market for that reason."
Supply has been light the past two weeks, as it typically is this time of the year. The past week offered just $1.78 billion in new deals. The prior week saw just $10.8 million in new issues.
Potential long-term volume for this week is expected to pick up, totaling an estimated $4.88 billion.
That breaks down into $3.61 billion scheduled for negotiated sale this week, versus a revised $841.1 million that were sold last week. Bonds scheduled for competitive sale this week total $1.27 billion, compared with $939.6 million last week.
Further help may be on the way soon. The Bond Buyer's 30-day visible supply for Monday shows $7.96 billion planned.
Leading all deals this week, JPMorgan expects to price $775 million New York City Transitional Finance Authority tax secured subordinate bonds. Retail order periods are expected Tuesday and Wednesday, followed by pricing Thursday.
Litigation filed to challenge the financing arrangement for a new Minnesota Vikings football stadium forced the delay of a $468 million Minnesota state general fund appropriation bond, which RBC Capital Markets had expected to price Tuesday after a retail order period Monday.
Minnesota Management and Budget Commissioner Jim Schowalter elected on Sunday to shelve the sale. His decision fell on the heels of news concerning the filing of a petition with the Minnesota Supreme Court on Friday to block the sale.
At press time, yields on the Municipal Market Data triple-A scale have yet to be updated. They started the day lower beyond the front end of the yield curve. Credits maturing after two years firmed by as much as three basis points.
The 10-year triple-A yield closed Friday seven basis points lower, at 2.64%. The 30-year dropped nine basis points to 4.01%, while the two-year yield slipped one basis point to 0.34%.
The Municipal Market Advisors benchmark triple-A scale saw yields fall Friday by as much as 10 basis points across the curve. The 10-year triple-A yield fell eight basis points to 2.63%. The 30-year plummeted 10 basis points to 4.20%, while the two-year dipped two basis points to 0.33%.
Treasuries continue to firm heading into the afternoon. The 10-year yield has dropped four basis points to 2.84%. The 30-year yield fallen two basis points to 3.78%, while two-year yield has slipped two basis points to 0.37%.
