NEW YORK – The California municipal market was slightly firmer Thursday amid light to moderate secondary trading activity, as 10-year munis continued to dip to historically low levels, reaching the fourth record low in the past week.
“You wonder what’s going to stop the rally at this point,” a trader in San Francisco said. “I’m not really seeing any evidence that we’re approaching the end. It’s another couple basis points today, and there are no real signs of a slowdown.”
The Municipal Market Data triple-A scale yielded a record-low 2.43% in 10 years and 3.53% in 20 years Thursday, following levels of 2.46% and 3.55% Wednesday. The scale yielded 3.87% in 30 years Thursday, following 3.88% Wednesday.
Thursday’s triple-A muni scale in 10 years was at 88.7% of comparable Treasuries and 30-year munis were at 98.2%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 109.0% of the comparable London Interbank Offered Rate.
The Treasury market showed some losses Thursday. The benchmark 10-year note was quoted recently at 2.72% after opening at 2.71%. The 30-year bond was quoted recently at 3.93% after opening at 3.92%. The two-year note was quoted recently at 0.55% after opening at 0.52%.
Activity in the California new-issue market was light Thursday.
In economic data released Thursday, initial jobless claims increased by 2,000 to 484,000 for the week ending Aug. 7, a level above economists' estimates and the highest total since February.
Continuing claims decreased by 118,000 to 4.452 million, the lowest level since June 26.
Economists expected 465,000 initial claims and 4.540 million continuing claims, according to the median estimate from Thomson Reuters.
Import prices increased 0.2% in July, the first increase in three months, as fuel imports increased.
Export prices declined 0.2% in July.
Import prices excluding fuel fell 0.3% in July and slid 0.5% in June. This was the first back-to-back decline in non-fuel import prices since February and March 2009. The June decline was the first in 11 months. Import prices excluding petroleum declined 0.2% in July.
Economists expected import prices to increase 0.4%, according to the median estimate from Thomson Reuters.
Previous Session's Activity
The most actively traded security in the state yesterday was Goleta Water District 5s of 2035, which traded 170 times at a high of par and a low of 97.127.
