NEW YORK – Trading was quiet Monday morning as yields held steady.
“It feels like a Monday in the summer right now,” said a trader in New York. “It is very quiet this morning and there is not a whole lot going on.”
This trader added there were a couple trades happening in the front end of the curve around one- and two-year paper, but “not a lot is trading.”
Some leftovers from last week’s Hudson Yards Infrastructure Corp. are trading and while there are deal makers on the bid side and some on the offer side, according to the trader, “no one is hitting it yet.”
“Until yields loosen up a bit, it will be quiet,” this trader added.
Tax-exempt yields were holding steady in the early parts of the curve and rose slightly in the later maturities, according to Municipal Market Data. Yields were unchanged through 2022 and rose one basis point after that.
The benchmark 10-year muni yield held steady at 2.43%. It remained 46 basis points above the record low it held on Sept. 23.
The two-year yield held steady at 0.45% for the eighth consecutive trading session. The 30-year finished Friday at 3.71%, up two basis points.
Monday morning, Treasury yields were firming. The benchmark 10-year Treasury yield fell one basis point to 2.21%. The 30-year fell four basis points to 3.24%. The two-year held steady at 0.28%.
Munis continue to outperform Treasuries, and the muni-Treasury ratio decreased to 110% on 10-year bonds and 113.8% on 30-year bonds.
“This is a continued improvement from ratios which reached 128.4% and 128.6% respectively, their highest level for the past 12 months, approximately three weeks ago,” MMD analyst Daniel Berger noted in his morning research post.
Volume in the new issue market is expected to hit $7.37 billion this week.
The negotiated calendar will see $5.86 billion with three large deals scheduled for later in the week. The Massachusetts School Building Authority is expected to lead the way Thursday with a $600 million issue of Series 2011B dedicated sales tax bonds.
The Chicago Transit Authority plans to issue $559.7 million Wednesday of sales tax receipt revenue bonds and capital-grant receipts revenue bonds. And California is set to come to market Wednesday with $500 million of economic recovery refunding bonds.
The competitive market will see $1.51 billion this week. The largest deals include Illinois selling $300 million sales tax refunding debt, expected Tuesday. On Wednesday, the Port Authority of New York and New Jersey is supposed to come to market with $400 million of refunding bonds.
