NEW YORK – A quiet Monday morning continued into the afternoon as traders said the market was dead and tax-exempt yields were unchanged throughout the curve.
“A whole lot of nothing” is happening, said a New York trader. “It’s a pretty quiet Monday.”
That sentiment was unchanged from the morning when the tax-exempt market seemed to be at a standstill.
In Monday afternoon trading, tax-exempt yields were steady across the board, according to the Municipal Market Data scale. On Friday, tax-exempt yields ended flat throughout the curve. The two-year yield closed at 0.42%, the 10-year yield ended the week at 2.30%, and the 30-year yield finished at 3.71%.
Treasuries made small moves in the long-end by early afternoon as Italy stole the headlines away from Greece. “The focus is shifting around Europe, from one weak area to the next,” Sal Guatieri, senior economist at BMO Capital Markets, wrote in his research note. “Relief that Greece will form a unity government is more than offset by concern that Italy’s worsening political drama will bump it into the bailout camp currently occupied by Greece, Ireland and Portugal.”
The news is pushing long-dated Treasury yields lower as investors move to the safe-haven asset. The 10- and 30-year yields were both down by five basis points to 2.00% and 3.05%, respectively. The two-year was flat at 0.24%.
In the primary market today, high-grade issues stole the spotlight.
Citi priced for retail $600 million New York City Transitional Finance Authority future tax secured bonds and tax-exempt subordinate bonds. The credit is rated Aa1 by Moody’s Investors Service and AAA by Standard & Poor’s and Fitch Ratings.
Yields ranged from 2.85% with a 4% coupon in 2022 to 4% priced at par in 2033. Debt maturing in 2013 was offered via sealed bid. Credits maturing in 2024, 2025, 2027, 2028, 2032, and 2038 were not offered for retail. The bonds are callable at par in 2021.
U.S. Bancorp won the auction for $25 million Lake County Forest Preserve District, Ill., general obligation bonds. The credit is rated Aaa by Moody’s and AAA by Standard & Poor’s. Details were not available by press time.
