The municipal market was flat during Thursday’s abbreviated session, with very little secondary trading activity in advance of the Christmas holiday.
“There’s nothing happening, which is exactly how you’d figure today would go,” a trader in Los Angeles said Thursday. “It figures to be even quieter next week. There’s pretty much nothing on the new-issue calendar and a lot of people will be on vacation. It’s just that time of year.”
The Municipal Market Data triple-A 10-year scale was unchanged Thursday at 3.14%, the 20-year scale remained at 4.37%, and the scale for 30-year debt held at 4.66%.
“There is very little going on right now,” a trader in New York said. “Not many people are here, but those that are in are just waiting to get out of here. We’re just flat with very light trading at the moment.”
Thursday’s triple-A muni scale in 10 years was at 92.4% of comparable Treasuries and 30-year munis were at 104.0%, according to MMD. Meanwhile, 30-year tax-exempt triple-A general obligation bonds were at 111.0% of the comparable London Interbank Offered Rate.
The Treasury market showed some losses Thursday. The benchmark 10-year note finished at 3.40% after opening at 3.35%. The 30-year bond was quoted near the end of the session at 4.48% after opening at 4.45%.
The two-year note finished at 0.66% after opening at 0.63%.
Trades reported Thursday by the Municipal Securities Rulemaking Board showed little movement. A dealer sold to a customer Port Authority of New York and New Jersey 5.375s of 2028 at 4.76%, even with where they traded Wednesday. A dealer sold to a customer taxable California Build America Bond 7.6s of 2040 at 7.31%, which is unchanged from Wednesday.
In economic data released Thursday, initial jobless claims dropped by 3,000 to 420,000 for the week ending Dec. 18, matching economists’ expectations.
Continuing claims declined 103,000 to 4.064 million for the week ending Dec. 11. That was lower than the 4.110 million of continuing claims predicted by a median estimate of economists polled by Thomson Reuters.
Durable goods orders dropped 1.3% in November, the second straight decline, as transportation orders sank. Durable goods excluding transportation increased 2.4%, the category’s largest increase since March.
Economists expected durable goods would fall 0.4% and orders excluding transportation would increase 1.6%.
Personal income rose 0.3%, while personal spending increased 0.4% in November as spending on core expenditures rose by the smallest amount on record.
Core personal consumption expenditures, which excludes food and energy spending and is the Federal Reserve’s preferred measure of inflation, increased 0.8% annually in November. October’s core PCE figure was revised lower to a 0.8% annual increase from a 0.9% rise. Both months’ figures are the lowest on record dating back to 1960.
Core PCE in September was also revised lower to a 1.1% increase from a 1.2% gain.
Economists polled by Thomson Reuters expected incomes would rise 0.2% and consumption would increase 0.5%, according to the median estimate.
New home sales increased 5.5% to a seasonally adjusted annual rate of 290,000 in November.
Sales in October were revised lower to 275,000 from 283,000 reported last month. September sales were unrevised at 308,000 and sales in August were revised lower to 274,000, a record low.
Economists were expecting 300,000 new home sales in November.
The University of Michigan’s final December consumer sentiment index reading was 74.5, compared to the preliminary December 74.2 reading. Economists predicted a 74.8 reading for the index.
