NEW YORK – The California municipal market was slightly weaker Friday amid somewhat light secondary trading activity.
“There is some activity out on the Street, though it’s reasonably quiet,” a trader in Los Angeles said. “We’re probably weaker two or three basis points overall. There’s probably a bit more weakness out long, but not more than four basis points out there, while the shorter end is closer to two. Still, overall, I’d say two, maybe three basis points cheaper.”
The Municipal Market Data triple-A scale yielded 2.36% in 10 years Friday, up four basis points from Thursday’s 2.32%, while the 20-year scale also climbed four basis points, to 3.36% from Thursday’s 3.32%. The scale for 30-year debt yielded 3.77%, four basis points higher than Thursday.
Friday’s triple-A muni scale in 10 years was at 91.5% of comparable Treasuries and 30-year munis were at 94.2%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 104.4% of the comparable London Interbank Offered Rate.
The Treasury market was mostly weaker Friday. The benchmark 10-year note was quoted recently at 2.57% after opening at 2.51%.
The 30-year bond was quoted recently at 3.98% after opening at 3.92%. The two-year note was quoted recently at 0.37% after opening at 0.38%.
In economic data released Friday, consumer prices climbed more slowly than economists estimated in September, inching up 0.1% from the previous month.
Core prices, which exclude volatile food and fuel costs, were unchanged for a second month and have risen only 0.8% the past 12 months — the smallest increase in 49 years.
Economists expected September consumer prices would increase 0.2% and core prices would edge up 0.1%, according to the median estimate from Thomson Reuters.
Retail sales increased 0.6% in September to post their third consecutive monthly gain. Excluding autos, retail sales rose 0.4% from the previous month. Retail sales excluding autos, gasoline, and building materials were up 0.4%.
Economists expected dual 0.4% gains in September for both retail sales and retail sales excluding autos, according to the median estimate from Thomson Reuters.
Business inventories rose 0.6% in August, while sales crept up 0.1%.
Economists polled by Thomson Reuters expected business inventories to increase 0.5% for August.
Activity in the California new-issue market was light Friday.
Previous Session's Activity
The most actively traded security in the state yesterday was taxable California BABs 7.95s of 2036, which traded 200 times at a high of 111.051 and a low of 105.535.
