The tax-exempt market kept its focus on the primary Thursday as the remainder of the week's largest deals get priced.
Traders said that munis were slightly weaker for the fourth session. While the primary is expected to steal the attention, the secondary isn't completely quiet.
"There is still a lot of primary coming today," a New York trader said. "Munis are down a little but bids are holding in there."
In the primary market, Bank of America Merrill Lynch is expected to price for institutions $810.8 million of Dormitory Authority of the State of New York personal income tax revenue bonds, rated AAA by Standard & Poor's and AA by Fitch Ratings.
In retail pricing Wednesday, yields on the first series, $755.5 million of tax-exempt bonds, ranged from 0.31% with 2% and 5% coupons in a split 2014 maturity to 3.5% priced at par in 2037. Portions of credits maturing between 2021 and 2028, between 2030 and 2034, and in 2042 were not offered for retail. The bonds are callable at par in 2022. Credits maturing in 2022 are not callable.
Yields on the second series, $55.3 million of tax-exempt bonds, ranged from 0.36% with a 2.5% coupon in 2014 to 3.30% with a 5% coupon in 2037. The bonds are callable at par in 2022.
Jefferies & Co. is expected to price for institutions $727 million of Massachusetts School Building Authority senior dedicated sales tax refunding bonds, rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch.
In retail pricing Wednesday, yields ranged from 0.75% with 3% and 4% coupons in a split 2017 maturity to 3% priced at par in 2030. Portions of credits maturing between 2028 and 2030 were not offered for retail. The bonds are callable at par in 2022.
JPMorgan is expected to price $519.5 million of city of San Antonio, Texas, Public Facilities Corp. improvement and refunding lease revenue bonds, rated Aa2 by Moody's, AA-plus by Standard & Poor's and AA by Fitch.
In the competitive market, Maryland University Systems should auction $173.8 million of revenue bonds in two pricings - a $115 million deal followed by a $58.8 million deal. The bonds are rated Aa1 by Moody's and AA-plus by Standard & Poor's.
On Wednesday, the 10-year Municipal Market Data yield and the 30-year yield finished flat at 1.70% and 2.87%, respectively. The two-year closed flat for the 11th session at 0.30%.
The 10-year yield now trades 10 basis points above its record low of 1.60% set July 26. The 30-year yield is up eight basis points from its 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 1.72% and 2.92%, respectively. The two-year was steady at 0.27%.
In economic news, the U.S. international trade deficit grew 41% to $44.2 billion in August, resulting from $181.3 billion of exports and $225.5 billion of imports. The deficit came right near analyst expectations of $44 billion.
"Illustrating the challenges facing the global economy, real exports have declined 7.5% at an annual rate over the last three months and the fourth consecutive sub-50 reading on the ISM manufacturing exports index in September does not point to a turnaround any time soon," wrote economists at RDQ Economics. "Trade started the third quarter as a slight add to real GDP growth but the July and August data together suggest that trade will subtract modestly from growth. Next week's reports on retail sales for September and August inventories will help with the fine-tuning of third-quarter GDP estimates."
In other economic news, initial jobless claims fell 30,000 to 339,000 for the week of October 6, the lowest level since Feb. 16, 2008. Economists had expected a decrease of 2,000 to 365,000.
"Initial jobless claims can be difficult to seasonally adjust in the first week of a quarter and the Labor Department noted that most of the decline in initial claims was due to filings in one state," wrote RDQ economists. "For this reason we would not read too much into the drop in initial claims in the first week of October and it will likely take a couple of weeks before we can assess the underlying level of claims."