Traders are nibbling around the edges of the municipal market Monday morning in anticipation of a decent week of new issuance set to arrive in the coming days.
Municipal yields are largely holding their levels as the primary and secondary markets slowly awaken. Traders are seeing mostly limited activity.
"The Treasury market is a bit firmer, but there's not much happening in municipals," a trader in New York said. "We're not really following yet."
The primary should see another reasonably solid week of volume this week. The market can expect $7.70 billion to be issued. That compares with last week's revised $7.36 billion.
In the week's second-largest deal, RBC Capital Markets is expected to continue its retail order period for a second day for $1.55 billion of California various purpose GO and refunding bonds. They are rated A1 by Moody's Investors Service and A-minus by Standard & Poor's and Fitch Ratings.
On Friday, yields on the first series, $1 billion of various purpose GOs, ranged from 0.59% with 2% and 3% coupons in a split 2014 maturity to 3.75% with a 5% coupon in 2042. Bonds maturing in 2013 were offered via sealed bid. Portions of credits maturing in 2036 and 2042 were not offered for retail. The bonds are callable at par in 2022.
Yields on the second series, $550.3 million of various purpose GO refunding bonds, ranged from 0.59% with a 4% coupon in 2014 to 2.76% with a 5% coupon in 2027. Credits maturing in 2013 were offered via sealed bid. Institutions should have their crack at the debt Tuesday.
Bonds maturing in 2025, 2026, and between 2028 and 2030 were not offered for retail. Bonds maturing between 2025 and 2030 are callable at par in 2018.
On Friday the 30-year Municipal Market Data yield ended the week flat at 2.95%. The 10-year fell two basis points to 1.79% while the two-year closed at 0.29% for the 41st consecutive session.
Treasuries started Monday morning firmer from the belly of the curve on out. The benchmark 10-year dropped two basis points to 1.73%. The 30-year fell four basis points to 2.92%. The two-year held steady at 0.27%.