Tax-exempts continued to be very thinly traded Monday afternoon, continuing what has been a trend over the past few weeks.

Most traders eyed the largest deals expected to price Tuesday for any market movement. “We haven’t seen Pennsylvania bonds trade weaker ahead of the sale,” a Pennsylvania trader said. “There is no tremendous weakness and Pennsylvania GOs specifically haven’t widened out going into the deal.”

The biggest deals of the week – $950 million of Pennsylvania general obligation bonds and $800 million of Illinois GOs – should be auctioned Tuesday in the competitive market.

Trades of Pennsylvania bonds traded stronger Monday ahead of the sale while Illinois bonds were weaker Monday.

In block trading, a dealer bought from a customer Pennsylvania 5s of 2019 at 1.2%, five basis points lower than where the bonds were bought Wednesday.

In odd-lot trading, bonds from an interdealer trade of Pennsylvania 4.15s of 2022 yielded 0.85%, 15 basis points lower than where the bonds traded Tuesday.

In another odd-lot trade, bonds from an interdealer trade of Pennsylvania Turnpike Commission 5.25s of 2020 yielded 2.15%, 17 basis points lower than where the bonds traded Tuesday.

But Illinois traded weaker ahead of the Tuesday auction in the more volatile odd-lot trades.

A dealer bought from a customer Illinois taxable 6.9s of 2035 at 5.93%, seven basis points higher than where the bonds were bought Thursday.

A dealer sold to a customer Illinois taxable 6.63s of 2035 at 5.70%, up four basis points from where the bonds were sold Thursday.

Another dealer sold to a customer Illinois taxable 7.1s of 2035 at 5.77%, two basis points higher from where the bonds sold Thursday.

Outside Pennsylvania and Illinois, the general market felt thin, but stronger. “There has been a lack of depth in the market over the past two to three weeks,” the Pennsylvania trader said. “It’s a bit better today, but still thin. It’s a little firmer but it’s not a bond grab.”

He added that over the last few trading sessions, activity has picked up a bit, but is nowhere near the normal trading volume.

Markets were closed Friday for the long weekend, but on Thursday, municipal bond scales ended stronger.

Yields on the Municipal Market Data triple-A GO scale ended as much as two basis points lower. The 10-year and 30-year yields closed steady at 1.91% and 3.09%, respectively. The two-year finished flat at 0.31% for the 28th consecutive session.

Yields on the Municipal Market Advisors 5% coupon triple-A benchmark scale ended as much as one basis point lower. The 10-year and 30-year yields finished flat at 1.96% and 3.19%, respectively. The two-year held at 0.33% for the 23rd session.

Treasuries were stronger Monday afternoon. The two-year and benchmark 10-year yields fell one basis point each to 0.24% and 1.84%, respectively. The 30-year yield slid two basis points to 3.09%.

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