The pick-up in volume will not have a large impact on trading this week, investors said.
A trader in Chicago said this is because while volume is a lot higher than last week, the rise in issuance is not expected to reach $10 billion. Issuance is scheduled to total $7.9 billion after coming in at $3.4 billion last week.
The hike in issuance also will not have a sizable impact because there are no real heavyweight deals coming to market, the trader in Chicago said. The largest deal expected is the $550 million Connecticut general obligation bond deal on Thursday.
"There's a decently large new issue calendar, and the largest deal is $500 million so there is a variety of stuff to pick from," he said.
A trader in New York said because there will be so many choices the deals likely will not have a problem getting done.
The trader in Chicago said the deals will be helped by the fact it's a holiday-shortened week next week.
"There's a lot of cash out there, and Nov. 15 is a big rollover payment date," he said. "Fund flows were strong last week, and the year is getting more compact now. This is the last full week of November for trading and underwriting."
He said he expects buyers to go out and buy these deals and buy them aggressively.
The second trader in Chicago said something that could be a problem for issuers is possibility of a continued sell-off.
Municipal bonds sold off two weeks ago, and then held steady most of last week so yields remained at the higher levels. The market continued to sell-off some on Friday, with the benchmark 10-year triple-A GO and the 30-year GO ending at 2.17% and 3.08%, respectively, according to Municipal Market Data's triple-A scale.
Yields continued to rise on Monday with yields on bonds maturing from seven to eight years increasing as much as one basis point, according to MMD. Yield increased by up to two points for the nine to 10 year maturities, and as much as one basis points for bonds maturing from 11 to 12 years and 20 to 30 years.
The rest of the curve held steady.
Treasury yields were mixed on Monday with the two-year note falling two basis points to 0.52% from Friday's close. The 10-year and the 30-year both rose two basis points to 2.34% and 3.06%, respectively.
Related Links
