NEW YORK — The municipal market, shackled with persistently low yields and a lack of heavy deals on the docket, has failed to generate any momentum on the day. “Munis are tired,” said a trader in New York.
And without getting any help from Treasuries, munis have been content to ride out the rest of the week on the back of dreary economic news. The secondary market has also been steady but quiet, he added.
“We’re going to follow stocks,” the New York trader added. “We keep getting weak economic data. I can’t see it putting any pressure on rates.”
Tax-exempt yields started the day flat across the curve and crossed into the afternoon that way, as well, according to the Municipal Market Data.
The 10-year benchmark yield held at 2.63% for the sixth day in a row, the MMD scale showed. The 30-year yield ticked down one basis point to 4.23%, once again reaching its low since Nov. 12.
The two-year yield, at 0.42% for the ninth consecutive day, is hovering at its lowest level since Sept. 7, according to MMD numbers. Before that, it stayed at 0.44% for 17 straight sessions.
Treasury yields firmed across the curve heading into the afternoon. The 10-year yield fell three basis points to 2.89%. The 30-year yield inched down one basis point to 4.17%. The two-year yield also slipped a basis point to 0.35%.
Supply should continue to hold at relatively moderate levels. Munis slated for sale next week total $5.62 billion against a revised $5.82 billion this week, according to calculations from The Bond Buyer.
This would mark the fourth consecutive week where issuance has reached at least $5 billion. Last week, the market saw a revised $5.11 billion, following a revised $7.8 billion the week before. For the year, new deals have averaged around $3 billion.
But the coming week will be relatively strong, the New York trader said. “With the holiday coming the following week,” he said, “people will be trying to get deals in next week.”
