The tax-exempt market continued to rise as traders said the primary and secondary markets were active and stronger.
"The market has gone straight up since Hurricane Sandy," a New Jersey trader said. "Yields are grinding lower."
He added new deals have gone well this week but he has participated more in the secondary. "There were a lot of new issues last week but this week is more about the secondary. The secondary has moved up the last three days after the holiday weekend and it's active."
The New Jersey trader said he is finding better deals in the secondary market than in the primary.
In the primary market, JPMorgan is expected to price $841 million of Texas Transportation Commission Central Texas Turnpike System bonds, rated Baa1 by Moody's Investors Service, A-minus by Standard & Poor's, and BBB-plus by Fitch Ratings. The deal will be comprised of $616 million of first tier revenue refunding bonds and $225 million of first tier revenue put bonds.
Goldman, Sachs & Co. is expected to price for institutions $800 million of Hawaii general obligation bonds following a two-day retail order period. The bonds are rated Aa2 by Moody's and AA by Standard & Poor's and Fitch.
Morgan Stanley is expected to price $230.7 million of Pennsylvania Housing Finance Agency single family mortgage revenue bonds, rated AA-plus by Standard & Poor's. The deal consists of $124.3 million of bonds subject to the alternative minimum tax, and series of $6.4 million and $100 million of bonds not subject to the AMT.
In the competitive market, the New York City Transitional Finance Authority will auction $887.43 million of revenue bonds in five series, $524.83 million, $130 million, $100 million, $100 million, and $32.6 million.
On Wednesday, the Municipal Market Data scale posted gains for the seventh consecutive session and record low yields were set yet again. The 10-year yield dropped one basis point to 1.54%, setting a record low as recorded by MMD. The 1.54% record beat the 1.55% set Tuesday and the 1.57% set last Friday.
The 30-year MMD yield plunged four basis points to 2.60%, also setting a record low. The 2.60% beat the previous record of 2.64% set Tuesday and the 2.66% set Friday.
The two-year finished steady at 0.30% for the 34th consecutive trading session.
Treasuries were slightly weaker Thursday morning. The benchmark 10-year yield jumped three basis points to 1.61% while the 30-year yield increased two basis points to 2.74%. The two-year was steady at 0.25%.
In economic news, the October consumer price index rose 0.1% while the core rate rose 0.2%. The CPI data came nearly as economists expected.
"Despite the only [modest] increase in CPI prices for October, these prices have risen 5.4% at an annual rate over the last three months and the year-over-year CPI inflation rate has picked up to a six-month high of 2.2%," wrote economists at RDQ Economics. "In November, CPI prices are likely to decline on lower gasoline prices and inflation may moderate on a year-over-year basis. Though inflation in not an imminent concern, we do not view the Fed's conduct of monetary policy as being consistent with price stability in the medium term."
In other economic news, initial jobless claims soared 78,000 to 439,000 for the week ending Nov. 10. It was the highest reading since April and well above the 375,000 expected by economists.
Continuing claims rose 171,000 to 3.334 million for the week ending Nov. 3, much higher than the 3.230 million economists had expected.
"Initial jobless claims jumped in the week ending November 10th due to filings related to the superstorm Sandy," RDQ economists wrote. "Initial claims may continue to be affected by Sandy-related filings over the next couple of weeks and the claims data may be less helpful as an input into November payroll forecasts."
In more economic news, the Philadelphia Fed Index came in at a negative 10.7 in November versus a positive 5.7 in October. Economists had expected a reading of 2.0 for the index.
 "The weakness in this survey is more broad-based than that seen in the Empire State index as general business sentiment deteriorated in November, while orders, shipments, and employment all declined," RDQ Economists wrote. "As with the New York Fed's survey, the Philly Fed reported that respondents noted disruptions from the storm, but Sandy is not the entire story as the six-month outlook in this report shows softer general business conditions, slower growth in employment, and a decline in capital spending."

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