Modest retail and institutional trading in tax-exempts marks the launch of 2014 for the municipal bond market.
Traders have noticed several bid-wanteds and executions Thursday morning. Yields appear steady, they add.
The extended holiday period has produced the expected amount of limited market activity. Yet even given those expectations,
"Swap activity fell near the end of the year, so the follow-through is pretty anemic today," he said. "The few things that have traded don't seem like they're off a whole lot, comparing week-to-week."
Executions this morning have included a couple of five-million-bond trades and a few one-million-bond trades, the trader added.
No muni bond issuance is expected this week. In fact, few muni participants have returned to their desks following the New Year's holiday, as they're more content to sit out the rest of the week.
On the year, long-term muni issuance fell 13% in 2013, Thomson Reuters numbers showed. For last year, $329.8 billion reached the market in 11,267 deals, against $379.6 in 13,115 issues in 2012.
For the month of December, though, long-term issuance fell just 6%, to $25.2 billion in 757 deals, compared with $26.8 billion in 997 issues in the same period in 2012.
Muni watchers expect demand to remain weak. Muni bond mutual funds recorded a 31st straight week of outflows for the week of Dec. 25, according to Lipper FMI numbers.
Weekly reporting funds recorded outflows of $1.49 billion, with long-term muni bond funds providing the lion's share of the losses, at $1.15 billion.
Yields on the Municipal Market Data triple-A scale appear stronger by up to two basis points in the first eight years on the curve. They're steady beyond that point.
The triple-A, tax-exempt 10-year closed Tuesday's session steady at 2.77%. The 30-year held at 4.19%. The two-year yield was unchanged at 0.33% for a 32nd straight session.
Yields on the Municipal Market Advisors benchmark triple-A scale on Tuesday also remained unchanged across the curve. The 10-year triple-A yield held at 2.79%, the 30-year at 4.41% and the two-year at 0.36%.
Treasury yields started the day mixed across of the curve. The 10-year yield has held at 3.02%. The 30-year yield dipped one basis point to 3.95%. The two-year has ticked up one basis point to 0.40%.
In economic news, the Labor Department said Thursday that initial jobless claims declined 2,000 in the week ended December 28 to 339,000. Claims for the previous of December 21 were revised up to 341,000 from the initially reported 338,000.
Continuing jobless claims for the week ended December 21 were 2.833 million, lower than the revised 2.931 million the week before, which first had been reported as 2.923 million.
