New York – The tax-exempt market is closed for Veterans Day.
On Thursday, the Jefferson County, Ala., bankruptcy filing stole headlines, leaving the rest of the muni world quiet.
Munis finished Thursday steady along most of the curve with up to a three basis point increase from the belly of the curve on out, according to the Municipal Market Data scale.
The two-year muni yield closed at 0.42% for its eighth consecutive trading session. The 10-year muni yield finished up two basis points to 2.25%, and the 30-year muni yield closed up three basis points to 3.73%.
Treasury prices spent Thursday falling. The 10-year yield was back up above 2%, trading up nine basis points to 2.06%. The 30-year was up eight basis points at 3.11%. The two-year was flat at 0.24%.
The market can use the holiday to take a breather from news of Jefferson County’s bankruptcy filing. On Thursday, secondary trading activity of the county’s debt showed a significant increase.
Trades reported by the Municipal Securities Rulemaking Board showed blocks of over $1 million trading Thursday, a spike from just days before when fewer, smaller blocks were trading — denominations of around $10,000 to $20,000.
Most analysts don't expect the bankruptcy to have a ripple effect on the markets. Alan Schankel, managing director at Janney Capital Markets, noted in a research paper, “although this is certainly a headline event, the filing did not catch the market by surprise since the situation has been brewing for years.”
