NEW YORK — A slightly improved municipal market picture has come into focus Tuesday morning, marked by a touch more volume in the secondary. More market participants have also returned to their desks from hurricane-imposed house confinement.
The market has so far seen about $1.1 billion in volume, after struggling to get $4 billion Monday, a trader in New York said. But, as with the week as a whole, the market is still hamstrung by a lack of focus, due to the holiday weekend coming up and low volume in the primary market.
“Not too many bid-wanteds are out,” he said “There are a couple of large asset manager offerings today, but nothing in the high-grade spectrum, at this point.”
Tax-exempt yields are mostly unchanged throughout the curve Tuesday, according to the Municipal Market Data scale. Securities maturing between 2020 and 2022 are flat to one basis point lower.
Treasury yields have almost given up all of Monday’s slackening by firming across the curve this morning. The 10-year benchmark yield, after climbing nine basis points at the close, has dropped eight basis points to 2.20%.
The 30-year yield, after rising eight basis points Monday, has fallen eight basis points to 3.54%. The two-year yield has inched down two basis points to 0.20%, after ticking up two basis points Monday.
The benchmark 10-year muni yield ticked up one basis point to 2.27%. The 30-year muni yield also rose one basis point on the day, to 3.89%.
The two-year yield remained at 0.30% for a 14th straight session, hovering at its lowest yield in more than 40 years.
New issuance is historically low the week preceding Labor Day, and this week is not expected to be different. According to industry estimates, municipal bond sales scheduled for this week should total a paltry $1.2 billion, compared to a revised $4.4 billion last week.
The hurricane claimed a casualty, of sorts, among this week’s new deals. The New York Local Government Assistance Corp. decided to postpone its competitive sale of $191.2 million of Series 2011A fixed-rate, subordinate-lien refunding bonds to Wednesday from Tuesday. The New York comptroller’s office held the storm responsible for the rescheduling.
In economic news, the Conference Board reported Tuesday that the consumer confidence index sank to 44.5 in August from a downward revised 59.2 in July. The July index was originally reported as 59.5.
The index has reached its lowest level since April 2009, when it registered 40.8. Economists polled by Thomson Reuters anticipated the index would be 52.0.
