The municipal market was largely unchanged Friday, with a slightly firmer tone, amid light new-issue activity."It's fairly quiet out there," a trader in New York said. "I think a lot of people are just on the sidelines today, getting ready for the weekend. I'm not really seeing too much trading, and I'm not seeing really much movement either. I'd say we're pretty flat overall."
"There might be a bit of a better tone out there, but it's quiet," a trader in Los Angeles said. "It's hard to call it anything but unchanged, but I do think it feels maybe a touch firmer."
The Treasury market showed some gains Friday. The yield on the benchmark 10-year Treasury note, which opened at 3.54%, was quoted near the end of the session at 3.53%. The yield on the two-year note was quoted near the end of the session at 1.11%, after opening at 1.12%. And the yield on the 30-year bond, which opened at 4.33%, was quoted near the end of the session at 4.32%.
As of Thursday's close, the triple-A muni scale in 10 years was at 92.1% of comparable Treasuries, according to Municipal Market Data. Additionally, 30-year munis were 108.3% of comparable Treasuries. Also, as of the close Thursday, 30-year tax-exempt triple-A rated general obligation bonds were at 113.3% of the comparable London Interbank Offered Rate.
Trades reported by the Municipal Securities Rulemaking Board Friday showed some gains. A dealer sold to a customer Dormitory Authority of the State of New York 5s of 2034 at 5.17%, one basis point lower than where they traded Thursday. A dealer sold to a customer Clark County, Nev., Build America Bonds, 6.26s of 2023 at 6.27%, down one basis point from where they were sold Thursday. Bonds from an interdealer trade of Arizona's Salt River Project Agricultural Improvement and Power District 5s of 2038 yielded 5.04%, one basis point lower than where they traded Thursday. Bonds from an interdealer trade of California BABs, 7.5s of 2034 yielded 8.20%, down two basis points from where they were sold Thursday.
In economic data released Friday, personal income rose 1.4% in May, after a revised 0.7% rise the previous month. Economists polled by Thomson Reuters had predicted a 0.3% rise. Personal consumption rose 0.3% in May, after a revised no change the previous month. Economists polled by Thomson Reuters had predicted a 0.3% uptick.
The core personal expenditures deflator climbed 0.1% in May, after a 0.3% increase the previous month. Economists polled by Thomson Reuters had predicted a 0.1% rise.
The final June University of Michigan consumer sentiment index came in at 70.8, after a previous reading of 69.0. Economists polled by Thomson Reuters had predicted a 69.0 reading.
In the new-issue market Friday, Janney Montgomery Scott LLC priced $6.2 million of GOs for Pennsylvania's Mars Area School District. The bonds mature from 2010 through 2019, with yields ranging from 1.13% with a 2% coupon in 2010 to 4.00% priced at par in 2019. The bonds, which are callable at par in 2019, are insured by Financial Security Assurance Inc.
RBC Capital Markets priced $5.1 million of GOs for Pennsylvania's South Eastern School District. The bonds mature from 2010 through 2017, with yields ranging from 1.65% with a 2% coupon in 2011 to 3.50% with a 4% coupon in 2017. Bonds maturing in 2010 were not formally re-offered. The bonds, which are not callable, are rated AA by Standard & Poor's.
Groveland, Mass., competitively sold $793,200 of bond anticipation notes to Eastern Bank, with a net interest cost of 1.70%. The Bans mature in 2010, with a 1.7% coupon, but were not formally re-offered.