NEW YORK — Early trades on the day led some to see a firming market for Friday’s session. New York City’s Hudson Yards Infrastructure Corp. bonds and the Ohio State University taxables were reportedly trading rather consistently, much as they were late Thursday.
But the secondary market has developed its own momentum, or lack thereof, as the day has continued. Just before noon, market activity slowed. And yields weakened somewhat heading out the curve, a trader in New York said.
“It seemed like there was good follow-through earlier this morning from yesterday afternoon,” he said. “Probably about 11:00, it got slow. Now everyone’s looking over their books, determining where they stand.”
Tax-exempt yields were slightly weaker approaching the long end of the curve as Friday’s session crossed noon, according to the Municipal Market Data. Yields are steady through 21 years. Beyond that, they are flat to two basis points higher.
The benchmark 10-year muni yield Thursday slipped two basis points to 2.43%. It sits 46 basis points above the record low it held on Sept. 23.
The 30-year yield remained at 3.69% for a third straight session. The two-year yield hovered at 0.45% for a seventh consecutive session.
Treasury yields, as they have the past few sessions, are mostly weaker. The benchmark 10-year Treasury yield has increased two basis points to 2.21%.
The 30-year is four basis points higher at 3.25%. The two-year yield is holding steady at 0.28%.
The muni market expects a total of $7.4 billion of new issuance to be sold next week. That compares to the $7.7 billion the market saw this week.
Three deals — two negotiated and one competitive — provided both a disproportionate share of the volume as well as direction for the market. Traders saw most of this week’s supply absorbed with minimal impact. If anything, yields in the intermediate sector, particularly 10-years, firmed around 10 basis points.
The coming calendar could pose issues for investors, MMD Analyst Randy Smolik wrote in a recent research post. “The issuance of major deals is varied again and not compacted into a few mega sales like this past week,” he wrote. “But, high-grade deals were not numerous, which could explain the mix feel for the high-grade curve currently.”
