NEW YORK — The municipal market has followed the upward trend in Treasury yields Thursday morning. Both the primary and secondary markets are seeing more activity today than at this time Wednesday morning said a trader in California.
“There seems to be OK flow,” he said. “The market is stable. It’s slightly better, but over lower volume than usual.”
In the primary, institutions have shown interest in the $365 million of general obligation bonds RBC Capital Markets priced Wednesday for retail for the San Diego Community College District. It was released to institutions today after strong retail reception, the trader said.
In the secondary market, traders in California, at least, have shown more appetite for high-grade names that had been sitting on dealers’ inventory recently, the trader added.
Muni yields remained steady at the front of the curve, according to the Municipal Market Data scale. Yields for maturities in 2015 were flat to a basis point higher. Those between 2016 and 2024 were steady to two basis points higher. Yields for maturities in 2025 to 2027 were flat to one basis point higher. And bonds maturing after 2027 were flat to two basis points higher.
The two-year yield ended Wednesday steady at 0.42% for the 17th straight session. Prior to the streak, it had hovered at 0.44% for 17 consecutive sessions.
The benchmark 10-year muni yield remained at 2.76% for a third straight day. The 30-year yield inched up one basis point to 4.37%.
Treasury yields started the day higher. The 10-year yield jumped six basis points to 3.16%.
The two-year yield climbed four basis points to 0.47%. The 30-year yield edged up three basis points to 4.39%.
Treasuries may be reacting to unemployment numbers, which Thursday painted a somewhat rosier picture for the economy. The U.S. Department of Labor reported that in the week ending July 2, the advance figure for seasonally adjusted initial claims was 418,000, a drop of 14,000 from the previous week’s revised figure of 432,000. The four-week moving average was 424,750, a decrease of 3,000 from the previous week’s revised average of 427,750.
The advance seasonally adjusted insured unemployment rate was 2.9% for the week ending June 25, a decrease of 0.1 percentage point from the prior week’s revised rate of 3.0%.
