After a flurry of competitive deals Tuesday, the primary market took a breather Wednesday and traders turned to the secondary market.
"It's fairly quiet," a New York trader said. "We see some stuff out for the bid, but nothing that would get the blood pumping. There's really no primary market to speak of today."
He added the market feels heavy and is several basis points weaker.
In the primary, Rice Financial is expected to price $333.5 million of Houston, Texas, tax-exempt and taxable public improvement refunding bonds, rated AA by Standard & Poor's and Fitch Ratings.
Bank of America Merrill Lynch is expected to price $235 million of Bay Area Toll Authority toll bridge revenue bonds, rated Aa3 by Moody's Investors Service, AA by Standard & Poor's, and AA-minus by Fitch.
Municipal bond scales ended steady to one basis point weaker Tuesday after a mostly steady session Monday.
Yields on the Municipal Market Data 5% triple-A GO scale ended flat. The 10-year was steady at 1.70% for the fifth session and the 30-year closed unchanged at 2.90% for the third trading session. The two-year closed steady at 0.29% for the 13th session.
Yields on the Municipal Market Advisors 5% scale ended flat to one basis point higher. The 10-year was flat at 1.76% and the 30-year closed unchanged at 3.02% for the fourth session. The two-year was flat at 0.32% for the 13th session.
The Treasury yield curve flattened Wednesday morning. The two-year yield rose one basis point to 0.24% and the 10-year yield fell one basis point to 1.70%. The 30-year was steady at 2.90%.
In economic news, durable goods orders fell 5.7%, or $13.1 billion, to $216.3 billion in March. Excluding transportation, new orders slipped 1.4%. The decline was more than twice the 2.8% dip economists expected. Economists also expected a 0.5% gain in orders excluding transportation.
"A disappointing report that was significantly weaker than our expectations, which were in turn below consensus, and this is particularly true when the downward revisions to February's orders are factored in," wrote economists at RDQ Economics. "This report raises further questions about whether the pace of manufacturing growth is slackening as the economy heads into the second quarter and all eyes will be on the April ISM report for further insight on manufacturing activity."
They added, "Our guess is that manufacturing activity in the U.S. is being hampered by overseas economic weakness, particularly in Europe. However, we still believe in the theme of a moderate secular recovery in U.S. manufacturing in part due to a rising relative advantage on energy costs compared to some countries."