There was no stopping the losing streak in the tax-exempt market as traders said bid-wanteds in the morning were trading even lower by the afternoon.
"The market feels OK compared to recent days," a Chicago trader said, adding, however, that some say the market is at least five basis points weaker. "But it doesn't feel that weak to me."
Still, this trader added the market feels less cheap every day. "You buy a bond yesterday and it feels like a steal. The market sells off. You don't move them and the next day or two after another couple rounds of cuts it's not that cheap anymore."
In the primary market, JPMorgan is expected to price $300 million of Bon Secours Health System Obligated Group composite issue revenue bonds. The bonds are rated A3 by Moody's Investors Service and A-minus by Standard & Poor's and Fitch Ratings.
The revenue bonds were broken down into $185 million for the South Carolina Jobs Economic Development Authority; $55 million for Henrico County, Va., Economic Development Authority; $40 million for Russell, Ky.; and $20 million for Norfolk, Va., Economic Development Authority.
Piper Jaffray is expected to price $149 million of North Orange County, Calif., Community College District taxable bonds, rated Aa1 by Moody's and AA by Standard & Poor's.
On Monday, yields on the Municipal Market Data scale continued to climb. The 10-year yield and the 30-year yield jumped eight basis points each to 1.74% and 2.79%, respectively. The two-year finished steady at 0.30% for the 56th consecutive trading session.
Treasuries continued to sell off in the afternoon trading session. The benchmark 10-year yield increased three basis points to 1.81% while the 30-year yield jumped six basis points to 3.00%. The two-year yield rose one basis point to 0.27%.