NEW YORK – The tax-exempt market quieted Monday afternoon as a fast-paced initial reaction to the Treasury market and European elections dissipated.
“It’s very quiet today,” a New York trader said. “Early this morning when you first walked in the door there were a couple things going on but it has tapered off and it’s getting quiet this afternoon.”
He added most of the primary issuance is coming Tuesday, Wednesday, and Thursday and so there is not much to move the market Monday. “You can maybe call it up one basis point or two depending on where you are on the curve but it’s very slow today.”
Munis were slightly stronger early Monday afternoon, according to the Municipal Market Data scale. Yields inside five years were steady while the six-year yield fell one basis point. Outside seven years, yield dropped as much as two basis points.
On Friday, the 10-year yield fell three basis points to 1.82% while the 30-year yield dropped four basis points to 3.15%. The two-year yield closed flat at 0.31% for the 13th consecutive trading session.
Treasuries pared gains from initial reaction to the Greek and French elections and were steady from Friday’s level. The benchmark 10-year yield and the 30-year yield were flat at 1.88% and 3.07%. The two-year was steady at 0.27%.
In the secondary market, most trades reported by the Municipal Securities Rulemaking Board showed firming.
A dealer sold to a customer Dallas-Fort Worth International Airport 5s of 2045 at 3.90%, 11 basis points lower than where they traded last Tuesday.
A dealer bought from a customer Ohio’s University Hospitals Health System 5s of 2041 at 4.28%, two basis points lower than where they traded Friday.
Bonds from an interdealer trade of Illinois 4s of 2030 yielded 4.11%, two basis points lower than where they traded Friday.
Bonds from another interdealer trade of New York Metropolitan Transportation Authority 4s of 2034 yielded 4.03%, one basis point lower than where they traded Friday.
