NEW YORK - Yet another historic low on 10-year municipal yields was hit Monday as the California muni market was flat to slightly firmer amid fairly light secondary trading, lagging behind a Treasury rally that dropped 10-year Treasury yields to their lowest level since March 2009.
"Treasuries got a bit of a bump today, particularly 10 years and out, but we didn't follow it so much," a trader in Los Angeles said. "We'd been more tied to the Treasury market recently, but today, investors were mostly on the sidelines. That said, we probably picked up another basis point or two. It's maybe flat on the short end, but longer than 10 or so years, we're firming up again."
The Municipal Market Data triple-A scale yielded a record-low 2.39% in 10 years and 3.50% in 20 years Monday, following levels of 2.41% and 3.52% Friday. The scale yielded 3.84% in 30 years Monday, following 3.86% Friday.
Friday's triple-A muni scale in 10 years was at 89.9% of comparable Treasuries and 30-year munis were at 99.7%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 111.9% of the comparable London Interbank Offered Rate.
The Treasury market showed gains Monday. The benchmark 10-year note was quoted recently at 2.58%, its lowest level since March 2009, after opening at 2.67%. The 30-year bond was quoted recently at 3.73% after opening at 3.86%. The two-year note was quoted recently at 0.50% after opening at 0.53%.
In economic data released Monday, the Empire State Manufacturing Survey showed "conditions improved modestly in August for New York manufacturers," the Federal Reserve Bank of New York reported, as the general business conditions index climbed to 7.10 in the month from 5.08 in July.
Economists surveyed by Thomson Reuters had expected the index would be 8.00.
Activity in the California new-issue market was light Monday.
Previous Session's Activity
The most actively traded security in the state yesterday was insured Alameda Corridor Transportation Authority 6.5s of 2019, which traded 82 times at a high of 102.757 and a low of 101.256.
