The tax-exempt market continued to post steady to stronger trades for the 14th session despite yields falling within a few basis points of their record lows.
"I'm trying to get something going," a New York trader said. "It's a little busy. And I guess a little stronger."
In the primary market, Morgan Stanley is expected to price $350 million of Guam Power Authority revenue bonds, rated Baa3 by Moody's Investors Service, BBB by Standard & Poor's, and BBB-minus by Fitch Ratings.
On Wednesday, the 10-year Municipal Market Data yield dropped two basis points to 1.67% while the 30-year yield finished flat at 2.84%. The two-year closed flat for the seventh session at 0.30%.
Since munis began their steady to firmer streak on Sept. 17, the 10-year yield has plummeted 26 basis points from when it traded at 1.93%. The 30-year yield has plunged 22 basis points from when it traded at 3.06%.
The 10-year now hovers only seven basis points above its record low of 1.60% set July 26. The 30-year trades only five basis points above is record low of 2.79% hit July 25.
Treasuries were weaker Thursday morning. The benchmark 10-year yield and the 30-year yield increased three basis points each to 1.65% and 2.85%, respectively. The two-year yield rose one basis point to 0.24%.
In economic news, initial jobless claims rose 4,000 to 367,000 for the week ending Sept 29, compared to economists' expectations of 370,000. Continuing claims were unchanged at 3.281 million for the week ending Sept 22.
"Although the four-week average of claims was unchanged in the last week of September, claims have dropped below 370,000 in each of the last two weeks," wrote economists at RDQ Economics. "The rise in the average of claims might, therefore, be largely a result of Hurricane Isaac and claims join a list of economic indicators that have outpaced expectations in September. Fiscal cliff issues remain the largest threat to U.S. economic growth but even in the face of the threat of large tax hikes it appears that the economy continues to grow at a moderate pace."