NEW YORK — The municipal market has been slow to get out of the gate Monday, with little action in the secondary and significant issuance a day or two away.
There are too few trades in the secondary to set a course for prices. One trader in New Jersey described the market as “quiet and unchanged.”
Munis, at this point, feel content to disregard a softening of Treasury yields. “The municipal bond market does not seem phased by the weaker tone in Treasuries as offerings remain on the full side,” said Municipal Market Data analyst Dominic Vonella.
Muni yields started out flat across the curve Monday and held their course heading into the afternoon, according to the MMD.
The 10-year benchmark yield stands at 2.63% for the seventh day in a row, the MMD scale showed. The 30-year yield remained at 4.23% for a second straight day, its low since Nov. 12.
The two-year yield, at 0.42% for the 10th consecutive day, is hovering at its lowest level since Sept. 7, according to MMD numbers. Before that, it stayed at 0.44% for 17 straight sessions.
Treasury yields have been weaker across the curve crossing noon on Monday. The 10-year yield increased two basis points to 2.89%. The two-year yield climbed three basis points to 0.37%. The 30-year yield jumped five basis points to 4.23%.
The coming two-year note auction and vote on the restructuring of Greek debt may be making their presence felt on yields.
New issuance should continue to reach modest levels for the week. Munis scheduled for sale total $5.62 billion against a revised $5.82 billion last week, according to The Bond Buyer.
This makes it four consecutive week that issuance has topped $5 billion. For the year, new deals have averaged just more than $3 billion through May.
The largest deals slated for the week arrive Wednesday. They include a New York deal for $975 million from the Tobacco Settlement Financing Corp., and one for $900 million from the Citizens Property Insurance Corp. in Florida. Also, the Houston Airport System on Tuesday is expected to issue $500 million of subordinate-lien revenue refunding bonds.
On the day, JPMorgan priced for retail $167.3 million of Gwinnett County Water and Sewerage Authority of Georgia bonds. The credits were rated triple-A by the three major rating agencies.
Yields range from 0.25% with a 2.00% coupon in 2012 to 2.73% with a 5.00% coupon in 2021. Maturities from 2022 to 2025 were not offered to retail investors.
