NEW YORK – The three-day weekend is taking its toll on the tax-exempt market. Munis are a little stronger but activity and volume is slower than a typical Tuesday.
“The market is a little tired and it’s not moving much,” said a trader in New Jersey. “It’s stale and it was a long weekend so it feels like a Monday but it’s worse because it’s a three-day hangover.”
He added the markets are firmer Tuesday, but there is not a lot of activity or volume trading.
Munis were steady to firmer Tuesday afternoon, according to the Municipal Market Data scale. Yields inside the three-year were steady, while the four-year and five-year yields fell two basis points. Six-year to 10-year yields were steady while yields outside the 11-year were two basis points firmer.
On Friday, the two-year closed steady at 0.35%. The 10-year yield closed down five basis points to 1.71%, beating the previous record of 1.76% as recorded by MMD Thursday. The 30-year dropped nine basis points to 3.20%, beating the previous record of 3.29% registered on Thursday.
Treasuries were steady to slightly firmer on the long end. The two-year yield was steady at 0.23%. The 10-year and 30-year yields fell one basis point each to 1.86% and 2.90%, respectively.
In the primary this week, the tax-exempt market can expect $3.45 billion, down from last week’s $4.19 billion. In the negotiated market, about $2.42 billion is expected to be issued, up from last week’s revised $2.03 billion. On the competitive calendar, $1.03 billion is expected to come to market, down from last week’s revised $2.16 billion.
On Monday, a $463 million Massachusetts new and refunding general obligation SIFMA index bond issue was added to the calendar. The deal will be priced by Citi and is expected to hit the market Wednesday.
In the secondary market, trades reported by the Municipal Securities Rulemaking Board showed a big rally in just one trading session.
Bonds from an interdealer trade of Frisco, Texas, Independent School District 5s of 2031 yielded 2.84%, 20 basis points lower than where they traded Friday. Bonds from another interdealer trade of Sharyland, Texas, Independent School District 5s of 2038 yielded 3.33%, 11 basis points lower than where they traded Friday.
A dealer sold to a customer Florida’s JEA 4s of 2033 at 3.92%, 10 basis points lower than where they traded Friday. A dealer bought from a customer Illinois Metropolitan Pier and Exposition Authority 5s of 2050 at 4.63%, 11 basis points lower than where they traded Friday.
