NEW YORK – The California municipal market was flat to slightly firmer today. Traders said tax-exempt yields in the secondary market were flat to lower by one or two basis points.
“We’re a little bit better,” a trader in Los Angeles said. “Most of the activity is out long, and you can pick up a couple basis points out there. Not sure if there’s much movement on the shorter maturities though.”
The Treasury market showed gains today. The yield on the benchmark 10-year Treasury note, which opened at 3.30%, was quoted recently at 3.19%. The yield on the two-year note was quoted recently at 0.88%, after opening at 0.94%. And the yield on the 30-year bond, which opened at 4.05%, was quoted recently at 3.96%.
Also today, the Municipal Market Data triple-A scale yielded 2.57% in 10 years and 3.44% in 20 years, matching and extending their record lows, respectively, following yields of 2.57% and 3.47% yesterday, respectively.
As of yesterday’s close, the triple-A muni scale in 10 years was at 77.6% of comparable Treasuries, according to MMD. Additionally, 30-year munis were 95.6% of comparable Treasuries. Also, as of yesterday’s close, 30-year tax-exempt triple-A rated general obligation bonds were at 99.2% of the comparable London Interbank Offered Rate.
In economic data released today, initial jobless claims for the week ended Sept. 26 came in at 551,000, after a revised 534,000 the previous week. Economists polled by Thomson Reuters had predicted 535,000 initial jobless claims.
Continuing jobless claims for the week ended Sept. 19 came in at 6.090 million, after a revised 6.160 million the previous week. Economists polled by Thomson Reuters had predicted 6.180 million continuing jobless claims.
Personal income rose 0.2% in August, after a revised 0.2% increase the previous month. Economists polled by Thomson Reuters had predicted a 0.1% increase.
Personal consumption climbed 1.3% in August, after a revised 0.3% uptick the previous month. Economists polled by Thomson Reuters had predicted a 1.1% rise.
Construction spending increased 0.8% in August after a 1.1% drop the previous month. Economists polled by Thomson Reuters had predicted a 0.2% decline.
The Institute for Supply Management’s business activity composite index dipped to 52.6 in September from 52.9 in August. Economists polled by Thomson Reuters predicted the index would rise to 54.0.
Pending home sales increased 6.4% to a reading of 103.8 in August from an unrevised 3.2% rise to 97.6 in August. Thomson Reuters’ poll of economists had predicted a 98.6 reading.
Activity in the California new-issue market was light today.
Previous Session’s Activity
The Municipal Securities Rulemaking Board reported California 3s of 2010 as yesterday’s most active. The bonds traded 147 times at a high of 101.483 and a low of 100.885.
