The tax-exempt market ended on a quiet and steady note Friday as traders prepared for a three-day weekend.
The bond markets are closed Monday for President’s Day.
“Heading into the holiday weekend it’s already starting to slow,” a Virginia trader said. “It’s pretty light and steady.”
Overall for the week, the market had a confusing tone this week. “There were mix signals and conflicting technicals in the market this week,” he said. “The supply picture and activity on bid wanted said it was active and vibrant this week but the scale is soft and the larger activity of $5 million to $10 million blocks aren’t trading. It’s a very confusing market.”
Others agreed there wasn’t a big spur in trading during the week. “There is nothing going on,” a Chicago trader said. “It’s like Jack be quick in deals. They offer them quick and try to get rid of them. No one wants to make too big of a stance.”
He added that most market participants are waiting for a big uptick in issuance or outflows from muni bond funds to help spur activity. “At this point you’re trying to lay low and that seems to be the trend. We are all bored. The market is stuck right now.”
In the secondary market, trades compiled by data provider Markit showed mostly weakening.
Yields on Boise City, Idaho, Independent School District 5s of 2022 jumped three basis points to 1.89% while New Jersey Transportation Trust Fund Authority 5s of 2042 increased two basis points to 3.63%.
Yields on Maui County, Hawaii, 3s of 2025 rose one basis point to 2.55%.
In retail trades of under 100 bonds — or $100,000 par value — secondary activity was lower this week than last week, according to data from BondDesk Group.
There were 59,002 buy trades for the week ending Feb. 13 compared to the previous week’s 60,813 buy trades. Sell trades were also down just slightly to 35,040 versus the previous week’s 35,549 trades.
The ratio of buy trades to sell trades held steady at 1.7 for the week ending Feb. 13.
Dollar volume traded also fell just slightly compared to the week prior. There were $1.664 billion buy trades for the week ending Feb. 13, down from the previous week’s $1.708 billion buy trades. Sell trades fell to $1.033 billion from the previous week’s $1.048 billion.
The ratio of buy trades to sell trades held steady at 1.6.
On Friday, municipal bond market scales finished steady to a basis point weaker.
The Municipal Market Data triple-A GO scale ended flat to one basis point lower. The 10-year yield rose one basis point to 1.85%. The 30-year was steady at 2.92% for the third session while the two-year was steady at 0.32% for the fifth session.
The Municipal Market Advisors 5% coupon triple-A benchmark scale ended steady Friday. The 10-year yield finished steady at 1.87% for the third session while the 30-year yield also closed flat for the third session at 2.99%. The two-year closed unchanged at 0.35% for the 15th session.
Treasuries were slightly weaker Friday after a stronger trading session Thursday. The two-year yield and the benchmark 10-year yield rose one basis point each to 0.28% and 2.01%, respectively. The 30-year was flat at 3.18%.
Looking to next week, the primary market can expect $6.67 billion, up from this week’s revised $5.92 billion.
