NEW YORK – The California municipal market was slightly firmer Tuesday amid light to moderate secondary trading activity.
“We picked up a couple basis points outside of five or so years,” a trader in Los Angeles said. “We might be flat on the really short end of the curve, but for the most part, you’re talking a bump of one, two, maybe three basis points. It feels firmer.”
The Treasury market mostly showed some gains Tuesday. The benchmark 10-year note was quoted recently at 2.91% after opening at 2.96%. The 30-year bond was quoted recently at 4.04% after opening at 4.06%. The two-year note was quoted recently at 0.55% after opening at 0.55%.
The Municipal Market Data triple-A scale yielded 2.57% in 10 years and 3.65% in 20 years Tuesday, following levels of 2.58% and 3.67% Monday. The scale yielded 3.96% in 30 years Tuesday, matching 3.97% Monday.
Monday’s triple-A muni scale in 10 years was at 87.2% of comparable Treasuries and 30-year munis were at 97.8%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 99.8% of the comparable London Interbank Offered Rate.
Activity in the California new-issue market was light Tuesday.
In economic data released Tuesday, personal income and consumption were both flat in June on a seasonally adjusted annual rate.
Core PCE, which excludes food and energy costs, was also flat in June, but increased 1.4% from a year ago. The flat reading in monthly core PCE was the first since a string of three months of unchanged core PCE readings from October to December 2008.
Economists expected personal income to increase 0.2% and for consumption to increase 0.1%, according to the median estimate from Thomson Reuters.
Pending home sales fell 2.6% to a reading of 75.7 in June, a record low, from a revised 29.9% decrease to 77.7 in May, originally reported as a 30.0% decrease to 77.6.
Thomson Reuters’ poll of economists had predicted a 79.0 reading.
U.S. factory orders fell 1.2% in June, the second straight monthly decline, and more than double the drop economists expected, the Commerce Department reported Tuesday.
Orders excluding transportation fell 1.1%, the third consecutive decline.
Economists expected factory orders would fall 0.5% for the month, according to the median estimate from Thomson Reuters.
Previous Session's Activity
The most actively traded security in the state yesterday was insured Elk Grove Finance Authority 5s of 2025, which traded 82 times at a high of 95.905 and a low of 93.691.
