Market participants are eager for more supply, after the only large deal from Monday was easily digested. Issuers from New York and Texas will lead the way Tuesday.
The primary market continues to "play the same song, by the same band" said Dan Heckman, senior fixed-income strategist at U.S. Bank Wealth Management. "With that being strong demand and lack of supply."
Munis were stronger on Tuesday morning, as yields on some maturities were anywhere from one to three basis points lower, according to traders.
Secondary Market
The yield on the 10-year benchmark muni general obligation was anywhere from one to three basis points lower from 1.72% on Monday, while the 30-year muni yield was as many as two basis points lower from 2.75%, according to a morning read of Municipal Market Data's triple-A scale.
Treasuries were stronger on Tuesday morning. The yield on the two-year Treasury fell to 0.75% from 0.81% on Monday, while the 10-year Treasury yield decreased to 1.88% from 1.96% and the 30-year Treasury bond yield was down to 2.69% from 2.78%.
The 10-year muni to Treasury ratio was calculated on Monday at 87.7% compared to 88.7% on Friday, while the 30-year muni to Treasury ratio stood at 99.2% versus 99.8%, according to MMD.
Primary Market
On Tuesday, Nassau County, N.Y., will competitively sell $120.14 million of Series 2016B general improvement bonds. The issue is rated A2 by Moody's Investors Service, A-plus by Standard & Poor's and A by Fitch Ratings. The county last competitively sold comparable bonds on May 20, 2015, when JPMorgan won $168.90 million of Series 2015B general improvement bonds with a TIC of 3.78%.
Piper Jaffray is expected to price San Antonio, Texas' $215.39 million of water system junior lien revenue refunding bonds consisting of Series 2016A and Series 2016B taxable bonds on Tuesday. The deal is rated Aa2 by Moody's and AA by S&P.
Since 2006, the city of San Antonio has issued bonds an average of 7.2 times a year, selling about $12 billion, with the largest issuances in 2010 and 2012 when it offered $1.5 billion and $2.05 billion, respectively, and the lows in 2006 and 2011, when it issued $719 million and $411 million.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $642.2 million to $10.23 billion on Tuesday. The total is comprised of $3.32 billion of competitive sales and $6.91 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 34,523 trades on Monday on volume of $4.854 billion.
