The municipal market was unchanged to slightly firmer Friday, in light secondary trading activity."There's not a ton of activity, but we're doing a little bit better," a trader in New York said. "I'd say we're probably better a basis point or two. But it's real quiet."
"A lot of people are on the sidelines heading into the weekend, but there's a decent bid, and on the long end, we're probably cheapening up a basis point or so," a trader in San Francisco said. "So I'd say we're closer to better by a basis point than flat, especially on the long end. There's not a lot of movement on the short end, but I think I'd call it one better on the whole."
The Treasury market showed some gains Friday. The yield on the benchmark 10-year Treasury note, which opened at 3.59%, finished at 3.58%. The yield on the two-year note finished at 1.07%, after opening at 1.08%. And the yield on the 30-year bond, which opened at 4.44%, finished at 4.43%.
As of Thursday's close, the triple-A muni scale in 10 years was at 83.1% comparable Treasuries, according to Municipal Market Data. Additionally, 30-year munis were 103.8% of comparable Treasuries. Also, as of Thursday's close, 30-year tax-exempt triple-A rated general obligation bonds were at 109.0% of the comparable London Interbank Offered Rate.
Trades reported by the Municipal Securities Rulemaking Board Friday showed little movement. A dealer sold to a customer insured New Jersey's Newton School District 4.25s of 2026 at 3.96%, even with where they traded Thursday. Bonds from an interdealer trade of insured Texas' Spring Independent School District 4.5s of 2027 yielded 4.65%, even with where they were sold Thursday. A dealer sold to a customer University of Texas Board of Regents BABs 6.28s of 2041 at 6.28%, even with where they traded Thursday.
In economic data released Friday, the consumer price index was unchanged in July, after a 0.7% rise the previous month. Economists polled by Thomson Reuters had predicted no change.
The CPI core rose 0.1% in July, after a 0.2% uptick the prior month. Economists polled by Thomson Reuters had predicted a 0.1% gain.
Industrial production climbed 0.5% in July, after a 0.4% decrease the previous month. Economists polled by Thomson Reuters had predicted a 0.3% rise.
Capacity utilization rose to 68.5% in July, from a revised 68.1% the previous month. Economists polled by Thomson Reuters had predicted 68.3% capacity utilization.
Also, the preliminary August University of Michigan consumer sentiment index came in at 63.2, after a 66.0 level the previous reading. Economists polled by Thomson Reuters had predicted a 68.5 reading.
