NEW YORK – The municipal market was flat during Thursday’s abbreviated sessions, 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. “Next week, it figures to be even quieter. 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 was quoted recently at 3.40% after opening at 3.35%. The 30-year bond was quoted recently at 4.48%, after opening at 4.45%. The two-year note was quoted recently at 0.67% after opening at 0.63%.
In economic data released Thursday, initial jobless claims dropped by 3,000 to 420,000 for the week ending Dec. 18, matching economists' expectations, but the four-week moving average for initial claims, a less volatile figure, rose 2,500 to 426,000.
Continuing claims declined 103,000 to 4.064 million for the week ending Dec. 11, much lower than the 4.110 million of continuing claims predicted by a median estimate of economists polled by Thomson Reuters.
Personal income rose 0.3%, while personal spending increased 0.4% in November as core expenditures spending increased by the smallest amount on record.
Core PCE, 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.
Total personal consumption in October was revised higher to a 0.7% increase from the 0.4% gain reported last month. The October figure was the highest in 15 months.
Economists polled by Thomson Reuters expected incomes would rise 0.2% and consumption would increase 0.5%, according to the median estimate.
Durable goods orders dropped 1.3% in November, the second straight decline, as transportation orders sank.
Durable goods excluding transportation increased 2.4% the largest increase since March.
Economists expected durable goods would fall 0.4% and for orders excluding transportation would increase 1.6%, according to the median estimate from Thomson Reuters.
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, according to the median estimate from Thomson Reuters.
The University of Michigan's final December consumer sentiment index reading was 74.5, compared to the preliminary December 74.2 reading. Economists polled by Thomson Reuters had predicted a 74.8 reading for the index.
Visible Supply
The Bond Buyer's 30-day visible supply rose $24.1 million to $7.482 billion. The total is comprised of $775.9 million of competitive bonds and $6.706 billion of negotiated bonds.
Previous Session's Activity
The Municipal Securities Rulemaking Board reported 46,893 trades of 18,641 issues for volume of $12.39 billion. Most active was taxable New York Metropolitan Transportation Authority BABs 7.134s of 2030 that traded 346 times at a high of 105.500 and a low of 99.500.
