The municipal bond market will be waiting for Thursday's pricing of the District of Columbia's $534 million of general obligation bonds and the sale of the Lower Colorado River Authority, Texas' $231 million of revenue refunding bonds in the primary market.
Traders will also be watching bond yields to see if they give some ground after rising sharply in the past three trading sessions.
Secondary Market
Treasury prices were higher on Thursday as the yield on the two-year Treasury note decreased to 0.66% from 0.67% on Wednesday, while the 10-year yield declined to 2.33% from 2.36% and the 30-year yield dropped to 3.07% from 3.11%.
On Wednesday, the yield on the 10-year benchmark muni general obligation rose by four basis points to 2.31% from 2.27% on Tuesday, while the yield on the 30-year GO increased by six basis points to 3.30% from 3.24%, according to the final read of Municipal Market Data's triple-A scale.
In the past three trading sessions, the yield on the 10-year muni has moved 12 basis points higher while the 30-year has risen by 14 basis points.
The 10-year muni to Treasury ratio was calculated on Wednesday at 97.7% versus 100.3% on Tuesday, while the 30-year muni to Treasury ratio stood at 106.3% compared to 107.3%, according to MMD.
Primary Market
The District of Columbia will be offering $534.44 million of GOs, which are being priced by Citi. The deal consists of $500 million of Series 2015A new money bonds and $34.44 million Series 2015B refunding bonds. The issue is rated Aa1 by Moody's and AA by S&P and Fitch.
Since 1996, Washington, D.C., has issued about $9 billion of GOs, with the most issuance occurring in 2007 and 2008 when it offered $1.3 billion and $1 billion, respectively; D.C. sold no bonds in 2006 or 2009.
Bank of America Merrill Lynch is set to price the Lower Colorado River Authority, Texas' $231 million of Series 2015 transmission contract refunding revenue bonds for the LCRA Transmission Services Corp. on Thursday. The bonds are rated A by S&P and A-plus by S&P.
Tax-Exempt Money Market Funds Post Outflows
Tax-exempt money market funds experienced outflows of $1.09 billion, bringing total net assets to $244.09 billion in the period ended June 1, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $179.4 million to $245.18 billion in the previous week.
The average, seven-day simple yield for the 395 weekly reporting tax-exempt funds remained at 0.01% for a 109th straight week.
The total net assets of the 993 weekly reporting taxable money funds rose $6.28 billion to $2.401 trillion in the period ended June 2, after experiencing an inflow of $1.87 billion to $2.395 trillion in the prior week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 20th consecutive week.
Overall, the combined total net assets of the 1,388 weekly reporting money funds increased $5.19 billion to $2.645 trillion in the period ended May 26, which followed an inflow of $1.69 billion to $2.640 trillion in the prior period.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 49,983 trades on Wednesday on volume of $14.256 billion.
The most active bond, based on the number of trades, was the Eastern Illinois University's taxable Build America Bonds with a direct subsidy to issuer's certificates of participation Series 2009A 6.35s of 2036, which traded 497 times at an average price of 87.573 with an average yield of 7.541%. The bonds were initially priced at par to yield 6.35%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $2.36 billion to $11.49 billion on Thursday. The total is comprised of $5.17 billion competitive sales and $6.23 billion of negotiated deals.
