The tax-exempt market opened on a quiet note Wednesday morning though traders said the market continued to firm after a strong session Tuesday.
"It's opening quiet but it's firm again," a Chicago trader said, adding that all eyes are on the primary so far this week.
Later Wednesday, Morgan Stanley is expected to price $853.7 million of New York City GOs in multiple series, following a two-day retail order period Monday and Tuesday. The bonds are rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings.
JPMorgan is expected to price $262.7 million of University of Wisconsin Hospitals and Clinics Authority revenue bonds, rated Aa3 by Moody's and A-plus by Standard & Poor's.
In the competitive market, Oyster Bay, N.Y., is expected to auction $154 million of bonds.
New York City should auction $100 million of GOs, rated Aa2 by Moody's and AA by Standard & Poor's.
On Tuesday, municipal bond market scales finished stronger.
Yields on the Municipal Market Data triple-A GO scale ended lower. The 10-year yield plunged six basis points to 1.83% while the 30-year fell two basis points to 2.92%. The two-year closed at 0.31% for the sixth straight session.
Yields on the Municipal Market Advisors 5% coupon triple-A benchmark scale closed lower as well. The 10-year yield plunged six basis points to 1.84% while the 30-year yield fell two basis points to 3.00%. The two-year yield dropped one basis point to 0.33%.
Treasuries were mostly stronger Wednesday morning. The benchmark 10-year yield fell one basis point to 1.87% while the 30-year yield fell two basis points to 3.06%. The two-year yield rose one basis point to 0.26%.
In economic news, durable goods orders fell 5.2%, or $11.8 billion, to $217 billion in January. The numbers came in worse than the 4.0% drop expected by economists.
Excluding transportation, January new orders rose 1.9% following a 1.0% gain in December. Economists had predicted a 0.2% gain in orders excluding transportation.
"The drop in durable goods orders was almost entirely due to a plunge in orders for defense equipment," wrote economists at RDQ Economics. "In addition, the volatile civilian aircraft orders category dropped 34.0%. Away from these two sectors, the report was rather bright as non-transportation orders posted their fifth consecutive solid monthly gain driven by a 6.3% increase in a nondefense capital goods orders."
They added, "This report, along with the January ISM survey, provides support to the view that manufacturing growth is picking up. Core capital goods shipments declined in January but the balance between orders and shipments of capital goods is looking healthier as backlogs of core capital goods orders rose for the first time in eight months. Our take is that manufacturing activity is bouncing back after cautious behavior ahead of the fiscal cliff."
