NEW YORK - It was a clean sweep in the California municipal market Thursday as tax-exempt yields fell to record low levels in 10, 20, and 30 years, including for the eighth consecutive session in 10 years.
"We were pretty flat in the morning, but there is firmness seeping in now," a trader in Los Angeles said. "We're probably going to pick up at least another basis point or two when all is said and done."
The Municipal Market Data triple-A scale yielded a record-low 2.30% in 10 years and a record-low 3.42% in 20 years Thursday, following levels of 2.32% and 3.44% Wednesday. The scale yielded 3.78% in 30 years Thursday, also a new record, following 3.81% Wednesday.
Thursday's levels represent the eight straight historical low for 10-year munis, and the first record-breaking rally in 20 and 30 years since 2009. This also marks the first time record lows were reached in 10, 20, and 30 years on the same day since Oct. 2, 2009, which posted the all-time low in 20 and 30 years until Thursday and in 10 years until August 6.
Thursday's triple-A muni scale in 10 years was at 89.1% of comparable Treasuries and 30-year munis were at 103.3%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 114.9% of the comparable London Interbank Offered Rate.
The Treasury market showed gains Thursday. The benchmark 10-year note was quoted recently at 2.58% after opening at 2.63%. The 30-year bond was quoted recently at 3.66% after opening at 3.74%. The two-year note was quoted recently at 0.49% after opening at 0.50%.
Activity in the California new-issue market was light Thursday.
In economic data released Thursday, initial jobless claims increased 12,000 to 500,000 for the week ending Aug. 14, the third straight increase in weekly claims and the highest level for the calendar year.
Continuing claims decreased to 4.478 million in the week ending Aug. 7, the second consecutive decrease and the lowest level since June.
Economists expected 476,000 initial claims and 4.500 million continuing claims, according to the median estimate from Thomson Reuters.
The composite index of Leading Economic Indicators grew 0.1% in July.
LEI was revised to a 0.3% decline in June, originally reported as a 0.2% drop.
The coincident index rose 0.2% in July, after a revised 0.1% decrease in June, originally reported as unchanged, while the lagging index rose 0.4% after an unrevised 0.1% increase in June.
The LEI stands at 109.8, the coincident index is at 101.4 and the lagging index is at 107.9.
Economists polled by Thomson Reuters predicted LEI would be up 0.2% in the month.
The region's manufacturing sector weakened in August, as the general business conditions index slipped to negative 7.7 from positive 5.1 in July, this month's Federal Reserve Bank of Philadelphia Report on Business indicates.
Economists surveyed by Thomson Reuters predicted a reading of 7.0 for the index.
Previous Session's Activity
The most actively traded security in the state yesterday was California 4.5s of 2030, which traded 63 times at a high of 98.277 and a low of 94.800.
