Market participants are already impatient with the summer doldrums and are indifferent toward Federal Reserve Board Chair Janet Yellen's upcoming speech on Wednesday.
It has been a slow week for municipal bonds ahead of the Fourth of July holiday and some investors are fed-up with the inactive nature of the market.
"It's relatively quiet on the short week," a New York trader said. "The same [expletive] seems to be happening. It's frustrating."
Not even Yellen's speech on monetary policy at the International Monetary Fund central banking conference in Washington seems to interest traders.
"She won't say that much," a West Coast trader predicted. "She'll say if this happens then that will happen. It's always a well-balanced speech. I think she learned her lesson from her first speech."
Back in March, Yellen said the Federal Reserve could begin increasing interest rates six months after ending its asset-purchase program in October 2014.
Panic immediately spread over the market following the speech causing munis to retreat. The possibility of an April 2015 rate hike shocked market participants, who expected the hike later ion 2015.
"There's nothing she's going to say that's going to surprise anyone," the West Coast trader said.
The new issue calendar is lighter than normal this week with only one large deal scheduled to enter the market on Wednesday.
"Normally the calendar for the week is larger, but because of the shortened holiday week there's light supply," the West Coast trader said.
Bank of America will bring $150.3 million of Northern Texas Municipal Water District revenue bonds to market on Wednesday.
"It's a pretty high quality deal, but I don't think there will be that much spread," the West Coast trader said. "I'm sure it will do fine in a period of positive in flow and limited competition."
The deal is rated Aa2 by Moody's Investors Service.
