NEW YORK - It was another record-setting day in the California municipal market Wednesday, as 10-year municipal yields declined to an all-time low yet again, while 30-year munis matched their record low.
Traders said tax-exempt yields were about two or three basis points lower Wednesday, amid light to moderate secondary trading activity.
"There wasn't a ton of trading today, but there's obviously a firmer tone out there that's been carrying for quite some time," a trader in Los Angeles said. "Obviously, we must be if we're hitting record lows almost daily in the 10-year sector. It's just a really firm market right now, but until there's a real infusion of supply in here or there's some data that comes along to change things, there's no reason why this won't continue for the next little while."
The Municipal Market Data triple-A scale yielded a record-low 2.32% in 10 years and 3.44% in 20 years Wednesday, following levels of 2.36% and 3.47% Tuesday. The scale yielded 3.81% in 30 years Wednesday, following 3.83% Tuesday.
While 10-year munis keep setting historical lows, Wednesday marked the first time during this rally that 30-year munis reached their record low. Wednesday's 3.81% level matches the low set on Oct. 2, 2009.
Additionally, 20-year tax-exempts are on the verge of making history. Wednesday's level of 3.44% is just one basis point higher than the all-time low of 3.43%, also set on Oct. 2, 2009.
Wednesday's triple-A muni scale in 10 years was at 87.9% of comparable Treasuries and 30-year munis were at 102.1%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 113.1% of the comparable London Interbank Offered Rate.
The Treasury market was mixed Wednesday. The benchmark 10-year note was quoted recently at 2.65% after opening at 2.63%. The 30-year bond was quoted recently at 3.74% after opening at 3.77%. The two-year note was quoted recently at 0.51% after also opening at 0.51%.
Activity in the California new-issue market was light Wednesday.
The economic calendar was light Wednesday.
Previous Session's Activity
The most actively traded security in the state yesterday was Alameda Public Financing Authority 6.517s of 2027, which traded 63 times at a high of 102.750 and a low of 100.500.
