NEW YORK – The California municipal market was slightly weaker Friday amid fairly light secondary trading activity.
“It certainly felt weaker today,” a trader in Los Angeles said. “Yields have been edging progressively higher all week.”
The Municipal Market Data triple-A scale yielded 2.43% in 10 years Wednesday, up five basis points from Thursday’s 2.38%, while the 20-year scale edged up three basis point to 3.32%, up from Thursday’s 3.29%. The scale for 30-year debt yielded 3.72%, two basis points higher than Thursday’s 3.70%.
The 20-year scale reached a record low of 3.27% Tuesday before weakening Wednesday and Thursday. Yields on the 10-year and 30-year triple-A scale bottomed out at 2.17% and 3.67%, respectively, on Aug. 25.
Thursday’s triple-A muni scale in 10 years was at 94.8% of comparable Treasuries and 30-year munis were at 100.3%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 110.8% of the comparable London Interbank Offered Rate.
The Treasury market showed some losses Friday. The benchmark 10-year note was quoted recently at 2.52% after opening at 2.51%.
The 30-year bond was quoted recently at 3.72% after opening at 3.68%. The two-year note was quoted recently at 0.43% after opening at 0.42%.
In economic data released Friday, personal income rose more than economists anticipated in August, surging 0.5% to post the largest gain since May of last year.
Consumer purchases rose 0.4% in August for a second month while core PCE rose 0.1% from July and was up 1.% from August of 2009.
Spending on construction unexpectedly rebounded from a 10-year low in August, growing 0.4% to $811.8 billion as government projects offset waning private construction activity.
Analysts in a Market News International survey had expected construction spending to fall 0.4% in August. Public construction rose 2.5%.
The Institute for Supply Management’s manufacturing index fell to 54.4 in September as new orders slowed, the Tempe, Ariz.-based group said Friday.
The factory gauge was at 56.3 in July. Readings above 50 represent growth. Lower readings signal contraction.
New orders fell to 51.1 from 53.1, inventories rose to 55.6 from 51.4, and employment fell to 56.5 from 60.4.
Also, the University of Michigan's final September consumer sentiment index reading was 68.2, compared to the preliminary September 66.6 reading. Economists polled by Thomson Reuters had predicted a 67.0 reading for the index.
Activity in the California new-issue market was light Friday.
Previous Session's Activity
The most actively traded security in the state yesterday was insured Trinity Public Utility District 4.5s of 2040, which traded 71 times at a high of 99.825 and a low of 96.825.
