NEW YORK – The California municipal market was slightly weaker Wednesday amid weakening Treasuries.
Traders said tax-exempt yields were mostly higher by one or two basis points.
“There’s been quite a bit of supply out there nationally this week and last, and with Treasuries off a little bit today, we ended up a little bit weaker,” a trader in Los Angeles said. “I’m not sure we’re off more than a couple basis points, but there’s definitely a softer tone out there.”
The Municipal Market Data triple-A scale yielded 2.34% in 10 years Wednesday, up two basis points from Tuesday’s 2.32%, while the 20-year scale edged up one basis point to 3.28%, up from Tuesday’s all-time low of 3.27%. The scale for 30-year debt yielded 3.69%, one basis point higher than Tuesday’s 3.70%.
The 20-year low of 3.27% lasted one day before reverted to 3.28%, the scale’s previous record low. That record was originally set Aug. 31, and was matched Thursday, Friday, and Monday, before being broken Tuesday. Yields on the 10-year and 30-year triple-A scale bottomed out at 2.17% and 3.67%, respectively, on Aug. 25.
Wednesday’s triple-A muni scale in 10 years was at 93.6% of comparable Treasuries and 30-year munis were at 100.0%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 111.5% of the comparable London Interbank Offered Rate.
The Treasury market showed was weaker Wednesday. The benchmark 10-year note was quoted recently at 2.50% after opening at 2.47%.
The 30-year bond was quoted recently at 3.68% after opening at 3.66%. The two-year note was quoted recently at 0.45% after opening at 0.43%.
The Treasury Department auctioned $29 billion of seven-year notes, with a 1 7/8% coupon, a 1.890% high yield, a price of 99.90. The bid-to-cover ratio was 3.04. The Federal Reserve banks bought $913.6 million for their own account in exchange for maturing securities.
The economic calendar was light Wednesday.
Previous Session's Activity
The most actively traded security in the state yesterday was San Francisco Redevelopment Agency 7s of 2030, which traded 62 times at a high of 104.571 and a low of 100.780.
