The municipal market was largely unchanged Friday, breaking a week-long string of trading sessions that saw tax-exempts lose ground.
"There's just not enough going on right now to move the scale," a trader in New York said. "It's Friday, it's pretty quiet, and I don't think people have much interest in buying right now unless they absolutely have to."
Trades reported by the Municipal Securities Rulemaking Board showed little movement. Bonds from an interdealer trade of California 5.25s of 2036 yielded 6.88%, even with where they were sold Thursday. A dealer sold to a customer Bay Area Toll Authority 5s of 2026 at 5.77%, even with where they traded Thursday. A dealer sold to a customer Florida's Jacksonville Housing Finance Authority 5s of 2030 at 5.98%, even with where they traded Thursday. A dealer bought from a customer insured School District of Philadelphia 5s of 2016 at 4.27%, even with where they were sold Thursday.
"It's a pretty quiet end of the week. Everyone sort of packed it in early, which given the climate right now certainly isn't a bad idea," a trader in San Francisco said. "We've been suffering losses pretty much day in and day out, but today, we're quiet and unchanged, with not a whole lot going on."
The Treasury market showed some mild gains Friday. The yield on the benchmark 10-year Treasury note, which opened at 2.60%, finished at 2.58%. The yield on the two-year note was quoted near the end of the session at 0.76% after opening at 0.78%. The yield on the 30-year bond, which opened at 3.05%, was quoted near the end of the session at the same level.
In economic data released Friday, retail sales dipped 1.8% in November, after a revised 2.9% drop the previous month. Economists polled by Thomson Reuters had predicted a 1.9% decline.
Excluding autos, retail sales dropped 1.6% in November, after a revised 2.4% decline the prior month. Economists polled by Thomson had predicted a 1.7% decrease.
The producer price index fell 2.2% in November, after a 2.8% drop the previous month. Economists polled by Thomson had predicted a 2.0% decline.
The PPI core rose 0.1% in November, after a 0.4% increase the previous month. Economists polled by Thomson had predicted a 0.1% uptick.
Business inventories were down 0.6% and sales levels fell 3.5% in October. Business inventories slid to $1.497 billion following a downwardly revised 0.4% decrease in September to $1.505 billion. Thomson Reuters had projected that business inventories would be off 0.2% in the month.
Meanwhile, the 3.5% decrease in overall business sales brought the category to $1.119 billion. The October figure followed a revised 2.4% decrease in September.
The University of Michigan's preliminary December consumer sentiment index reading was 59.1, compared to the final November 55.3 reading. Economists polled by Thomson had predicted a 55.0 reading for the index.
More economic data will be released this week. Tomorrow, the November consumer price index will be released, along with the November CPI core, November housing starts, and November building permits. Then, Thursday, initial jobless claims for the week ending Dec. 13 will be released, in addition to the November composite index of leading economic indicators.
Economists polled by Thomson Reuters are predicting a 1.3% drop in CPI, a 0.1% rise in the CPI core, 740,000 housing starts, 700,000 building permits, 560,000 initial jobless claims, and a 0.5% decline in LEI.
Activity in the new-issue market was light Friday.