A quiet trading session precedes a hefty primary calendar in the municipal market Tuesday.
Traders reportedly are ignoring the diverse bid pad on their screens Tuesday as they await the arrival of the lion's share of the calendar's biggest deals expected later in the day's session.
This has left the bid side, and muni yields, a little weaker to start the session, a trader in New Jersey said.
"People are looking at the primary; the secondary is pretty quiet," he said. "There are more bonds out for the bid today, especially in the Puerto Rico sector, but not many bites. The bid is a little softer."
This week anticipates $8.36 billion of new volume, led by two New Jersey Transportation Trust Fund Authority deals that total more than $1.2 billion. A revised $6.75 billion reached the market last week, according to Thomson Reuters.
The week's largest issues should hit the market Tuesday.
The biggest, $920.7 million of New Jersey Transportation Trust Fund Authority 2012 Series AA program bonds, is expected to lead all negotiated activity when Barclays prices it on Tuesday. Barclays should also price for the authority $326.2 million of Series A transportation system bonds Tuesday.
Institutional investors will take their shot at $817.4 million of Texas Transportation Commission state highway improvement general obligation bonds. Wells Fargo Securities held a retail order period for the deal Monday.
Raymond James | Morgan Keegan is expected on Tuesday to price $435 million New York City Municipal Water Finance Authority water and sewer second general resolution revenue bonds.
Tax-exempt yields are steady to start Tuesday, according to a market read.
Muni yields closed out Monday higher beyond the front end of the curve, after rallying for almost a week. The 10-year yield inched up to 1.48%, one basis point above the record low it set Wednesday and held for two more days, according to the Municipal Market Data scale read.
The 30-year yield also ended one basis point higher at 2.48%, dangling above its record low. The two-year held at 0.30% for the 46th straight trading session.
The Treasury yield curve has steepened a bit Tuesday. Yields opened mostly lower across the front and intermediate sections. The benchmark 10-year yield slid one basis point to 1.62%.
The two-year yield ticked down two basis points to 0.25%. The 30-year yield held steady at 2.80%.