The tax-exempt market stabilized Friday after a week of selling as relatively cheap municipal bonds attracted buyers.
Muni-to-Treasury ratios across the curve closed above 100% Thursday, drawing in non-traditional, or crossover, buyers. The 10-year ratio finished at 111.7% and the 30-year ratio closed at 121.4%. The five-year ratio closed at 101.5%.
"We finally stabilized," a Boston trader said. "Treasuries are up and crossover buyers are in. It's just so cheap."
This trader added that while retail usually drives the market, institutional buyers are pushing the market up 10 basis points Friday morning on 5% coupon bonds.
Thursday, yields on the Municipal Market Data scale ended as much as two basis points higher. The 10-year yield increased one basis point to 2.77%. The 30-year was steady at 4.31% for the second session and the two-year finished flat at 0.43% for the seventh consecutive session.
Yields on the Municipal Market Advisors scale ended as much as two basis points higher. The 10-year yield increased two basis points to 2.96% and the 30-year yield rose one basis point to 4.39%. The two-year was steady at 0.54% for the second session.
Treasuries were stronger. The benchmark 10-year yield slipped two basis points to 2.57% and the 30-year yield fell three basis points to 3.63%. The two-year yield fell one basis point to 0.33%.