Market Post: Munis Higher But With Little Confidence

The tax-exempt market was slightly firmer Monday afternoon, although traders said they weren’t too optimistic the rally could be sustained.

While the market appeared somewhat stronger, there wasn’t a strong enough tone to really move the market.

“Munis are higher,” a New York trader said. “But there is not much conviction. There is not much going on.”

In the primary, JPMorgan priced for retail $522.9 million of New York State Thruway Authority personal income tax revenue bonds. The bonds are rated AAA by Standard & Poor’s and AA by Fitch Ratings. Institutional pricing is expected Tuesday.

Yields ranged from 0.52% with 2% and 4% coupons in a split 2015 maturity to 3.03% with a 5% coupon in 2032. Bonds maturing in 2013, 2014, and between 2024 and 2031 were not offered for retail. The bonds are callable at par in 2021 except for credits maturing in 2022.

On Friday the 30-year Municipal Market Data yield finished flat at 3.01%. The 10-year was steady at 1.87% for the third consecutive trading session while the two-year closed at 0.29% for the 17th straight session.

The Treasury yield curve flattened in Monday afternoon trading. The two-year yield increased one basis point to 0.30% while the 30-year yield fell one basis point to 2.93%. The benchmark 10-year was steady at 1.82%.