Following a 10 basis point rally Friday, buyers took a step back Monday morning and waited for new issues to price before putting money to work.
Traders said buyers also waited for Aug. 1 reinvestment money before making any big trades. "It's pretty quiet today," a New York trader said. "Month-end is keeping buyers away from trading."
New deals in the primary market should help provide direction for the market later Monday. Citi is expected to price for retail the largest deal of the week, $1.1 billion of Ohio Turnpike Commission turnpike bonds, rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings. Institutional pricing is expected Tuesday.
Goldman, Sachs & Co., is seen pricing $292 million of Lehigh County Authority water and sewer revenue bonds for the City of Allentown, Pa. The taxable, tax-exempt and capital appreciation bonds are rated A by Standard & Poor's.
Friday, yields on the Municipal Market Data scale ended as much as 10 basis points lower. The 10-year yield slipped seven basis points to 2.70% and the 30-year yield fell 10 basis points to 4.21%. The two-year finished flat at 0.43% for the eighth consecutive session.
Yields on the Municipal Market Advisors scale also ended as much as 10 basis points lower. The 10-year yield fell seven basis points to 2.89%. and the 30-year yield dropped 10 basis points to 4.29%. The two-year was steady at 0.54% for the third session.
Treasuries were mostly weaker Monday morning. The benchmark 10-year yield increased two basis points to 2.58% and the 30-year yield rose four basis points to 3.65%. The two-year yield fell one basis point to 0.32%.