The tax-exempt market was firmer Friday morning after a relatively quiet week as a poor U.S. jobs number spurred the risk-off trade.
Munis were firmer Friday morning, according to the Municipal Market Data scale. Yields inside seven years were steady while yields on the eight- to 10-year dropped as much as two basis points. Outside 11 years, yield fell between one and three basis points.
On Thursday, the 10-year yield and the 30-year yield each fell one basis point to 1.84% and 3.15%, respectively. The two-year ended steady at 0.32% for the 24th straight session.
Munis followed Treasuries higher on poor economic data. The benchmark 10-year yield dropped five basis points to 1.55% while the 30-year yield fell four basis points to 2.67%. The two-year yield fell one basis point to 0.29%.
In economic news, June non-farm payrolls increased 80,000, with the jobless rate holding at 8.2%.
"The good news is that employment growth is not slowing further but there is no sign of it picking up either," wrote economists at RDQ Economics. "At this pace, job creation is not fast enough to lower the unemployment rate with the labor force growing at close to 150,000 per month on average. As for policy, we do not see this report as being weak enough for the Fed to push the QE3 button at the August meeting nor strong enough to take it off the table at the September meeting."