NEW YORK – The tax-exempt market is stronger Monday morning as a light new-issue calendar and a global sell-off in the stock market is pushing munis higher.
“The market is up maybe two to three basis points, but there is not a lot of activity in terms of trading,” a New Jersey trader said, adding Puerto Rico 5s of 2041 are selling for 5.07% Monday morning after being offered at 5.10% on Friday. “So were up on the long-end.”
He added focus is on the secondary market due to the light new issue calendar this week.
Munis were stronger Monday morning, according to the Municipal Market Data scale. Yields inside five years were steady while yields outside six years fell one to three basis points.
On Friday, the two-year yield closed at 0.31% while the 30-year yield finished at 3.28%. The 10-year closed the week off at 1.88%.
Treasuries were stronger as a global sell-off buoyed safe haven assets. The benchmark 10-year and the 30-year yields each fell six basis points to 1.91% and 3.06%. The two-year was steady at 0.27%.
In the primary market this week, munis can expect $5.17 billion, off from last week’s revised $7.97 billion. In the negotiated market, $3.54 billion is expected to be priced, down from last week’s revised $5.59 billion. On the competitive calendar, $1.63 billion is expected to be issued, down from last week’s revised $2.38 billion.
Later today, Citi is expected to price $153 million of North Carolina Medical Commission health care facilities revenue refunding bonds, rated A1 by Moody’s Investors Service and A-plus by Standard & Poor’s.