Market Post: Eurozone Fears Push Muni Yields Lower

Fears resurfacing over the Eurozone and Cyprus banks Monday morning pushed fixed-income assets higher on a global risk off trade.

Municipal bond prices followed Treasuries higher, reversing a two-week streak of losses.

"Munis have been down for a while and this is a little snap back," a New York trader said. "It's a bit higher this morning."

This trader said California bond yields traded one to two basis points lower on the short end.

In the primary this week, $9.51 billion is expected to be priced, up from last week's revised $6.08 billion. On the negotiated calendar, $7.77 billion should be priced, up from last week's revised $4.43 billion. On the competitive side, $1.74 billion is expected to be auctioned, up from last week's revised $1.65 billion.

On Friday, yields on municipal bond market scales ended flat to one basis point higher.

The Municipal Market Data triple-A GO scale ended steady. The 10-year and 30-year yields finished flat at 2.00% and 3.14%, respectively. The two-year finished flat at 0.31% for the 19th consecutive session.

Yields on the Municipal Market Advisors 5% coupon triple-A benchmark scale were flat to one basis point higher. The 10-year and 30-year yields closed steady at 2.03% and 3.22%, respectively. The two-year held at 0.33% for the 14th session.

Treasuries were stronger Monday morning after Eurozone fears resurfaced. The benchmark 10-year yield and the 30-year yield dropped five basis points each to 1.95% and 3.17%, respectively. The two-year yield fell one basis point to 0.25%.

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