A weaker Treasury market Thursday morning held munis back from posting another session of gains as traders said the municipal market was quiet with steady trading.
“I haven’t seen anything substantial trade as of yet,” a New York trader said. “With Treasuries backing off a little today, munis might be biased towards unchanged or even a little softer since we’ve had such a good rally. It’s a good time to pause.”
This trader added most of the primary deals priced Tuesday and Wednesday, also allowing the new-issue market to take a breath.
On Wednesday, yields on the triple-A Municipal Market Data scale ended as much as three basis points lower. The 10-year and 30-year yields fell two basis points each to 2.54% and 4.11%, respectively. The two-year was steady at 0.36% for the fourth session.
Yields on the Municipal Market Advisors scale ended as much as two basis points lower. The 10-year and 30-year yields slid one basis point each to 2.69% and 4.24%, respectively. The two-year was steady at 0.54% for the fifth consecutive trading session.
Treasuries were weaker Thursday morning after posting gains for four consecutive trading sessions. The benchmark 10-year yield rose three basis points to 2.65% and the 30-year yield rose four basis points to 3.69%. The two-year yield increased one basis point to 0.36%.
In economic news, initial jobless claims fell 5,000 to 305,000 for the week of Sept. 21, coming in lower than the 330,000 expected by economists. The adjusted four-week moving average fell to 308,000, the lowest level since 2007.
“If, as the Labor Department claims, California has caught up with its backlog of filings then the four-week average of claims should be a clean reading,” wrote economists at RDQ Economics. “This average has dropped by 22,500 since the August payroll survey week, which means over the last four weeks 90,000 fewer people filed an initial jobless claim compared to the four weeks running up to the August job survey.”
“In our view, it would appear that employment growth is stronger than suggested by the last two payroll reports and we think this view is supported not only by the claims data but also by the improved assessment of current labor market conditions reported in the Conference Board’s consumer confidence report,” the economists said.