The tax-exempt market took a breather Thursday morning, trading mostly flat after seven straight days of firming that pushed bond prices higher and yields lower by double digits.
In the face of weaker Treasuries and no supply to provide direction to the market, the municipal bond rally slowed following a run up, traders said. "There is no supply," a New York trader said. "Treasury weakness will probably halt the rally."
In the primary market, RBC Capital Markets is expected to price $76.8 million of Alaska Municipal Bond Bank general obligation bonds, rated Aa2 by Moody's Investors Service and AA-plus by Fitch Ratings.
On Wednesday, yields on the triple-A Municipal Market Data scale ended as much as four basis points stronger. The 30-year yield fell one basis point to 4.04%. The two-year and 10-year yields were steady at 0.34% and 2.44%, respectively.
Yields on the Municipal Market Advisors benchmark scale ended as much as five basis points firmer. The two-year yield slid five basis points to 0.48% and the 10-year yield fell three basis points to 2.59%. The 30-year was flat for the fourth session at 4.23%.
Treasuries were weaker again Thursday morning and ending lower Wednesday. The two-year yield rose one basis point to 0.32% and the benchmark 10-year yield increased two basis points to 2.55%. The 30-year was steady at 3.64%.