NEW YORK – The tax-exempt market is continuing to weaken for the third consecutive trading session as dealers are looking to sell.

“Munis are down,” said a trader in New York, adding dealers are putting out bids 10 basis points lower and they are “getting hit.”

“People are throwing out bids to see if anyone will hit them,” he said. “And people are selling.”

The Municipal Market Data scale had yet to be updated. But last week, munis weakened Thursday and Friday after strengthening since 2012 began. The 10-year and 30-year yields finished up nine basis points each to 1.83% and 3.34%. The two-year closed steady at 0.35% for its sixth consecutive trading session.

The losses on Thursday and Friday erased all gains made on the 10-year and 30-year since Jan. 6.

Treasuries continued losses for their fourth consecutive trading session as yields rose across the curve. The benchmark 10-year yield rose four basis points to 2.08% and the 30-year yield jumped five basis points to 3.16%. The two-year yield held steady at 0.25%.

In the primary market this week, $4.5 billion is expected to be issued, up from $3.1 billion last week. On the negotiated calendar, $3.8 billion is expected to come to market, up from last week’s $1.9 billion. In the competitive market, $735.6 million is expected, down from last week’s $1.2 billion.

Muni-to-Treasury ratios fell last week as munis outperformed Treasuries. On Friday, the five-year muni-to-Treasury ratio fell to 92.1%, down from 102.5% the week prior. The 10-year ratio closed at 90.1%, down from 91.9% the week before. The 30-year ratio fell to 107.7% from 110.0% the prior week.

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