The municipal bond market is set to welcome the first of the week's new supply as the top negotiated sale of the week is ready to be priced for retail investors.
Primary Market
Barclays Capital is expected to offer the top deal of the week -- the Dormitory Authority of the State of New York's $1 billion general purpose state personal income tax revenue bonds -- for mom and pop investors on Tuesday. The DASNY deal will be priced for institutions on Wednesday.
In the competitive arena, Miami-Dade County, Fla., has three separate sales of general obligation bonds totaling $371.93 million going up for bid on Tuesday. All three deals are rated Aa2 by Moody's Investors Service and AA by Standard & Poor's.
On Wednesday, Citigroup is expected to price the Broward County, Fla., School Board's $273 million certificates of participation. The COPs are rated A1 by Moody's, A by S&P and A-plus by Fitch Ratings.
Secondary Market
Treasury prices were higher on Tuesday, with the two-year note yield dropping to 0.64% from 0.66% on Monday. The 10-year yield declined to 1.97% from 2.03%, while the 30-year yield decreased to 2.54% from 2.61% on Monday.
On Monday, prices of top-quality municipal bond were stronger. The yield on the benchmark 10-year general obligation dropped five basis points to 1.96% from 2.01% on Friday, while the yield on 30-year GOs declined six basis points to 2.77% from to 2.83%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was at 95.6% on Monday compared to 94.8% on Friday, while the 30-year muni to Treasury ratio was at 106.4% versus 101.1% on Friday.
MSRB Reports Previous Session's Activity
The Municipal Securities Rulemaking Board reported 41,713 trades on Monday on volume of $8.142 billion.
Most active on Monday, based on the number of trades, was the New Jersey Transportation Trust Fund Authority transportation program bonds, Series AA 4 1/4s of 2044, which traded 290 times with an average price of 101.393 and an average yield of 4.07%.
Lipper Reports Muni Bond Outflows
Municipal bond funds which report weekly posted $9.414 million of outflows in the week ended Dec. 31, after experiencing inflows of $659.448 million in the previous week, according to the latest Lipper data. It was the first time since July that the funds saw outflows. In 2014, investors put money into the funds in 45 out of 53 weeks.
