Faced with lighter supply this week in the primary market, municipal bond trading opened on a slow note Monday morning, with few bid lists surfacing.
"It's dead this morning," one New York trader said.
A second New York trader said a few more bid lists started to emerge as the morning progressed, but overall activity still felt light.
In the primary market Monday, Morgan Stanley is expected to price for retail $300 million of Colorado Health Facilities Authority revenue bonds on behalf of SCL Health System. The bonds are rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings. Institutional pricing is expected Tuesday.
The deal comes amid a drop off in supply this week. The market can expect $4.33 billion in deals, down from last week's revised $7.43 billion. The negotiated market can expect $3.45 billion, down from last week's revised $5.06 billion. On the competitive calendar, $877.5 million should be auctioned, down from last week's revised $2.37 billion.
On Friday, yields on the triple-A Municipal Market Data scale ended as much as two basis points stronger. The 10-year and 30-year yields fell one basis point each to 2.49% and 4.07%, respectively. The two-year was steady at 0.35% for the 11th session.
Yields on the Municipal Market Advisors benchmark scale ended as much as one basis point firmer. The 10-year and 30-year yields slid one basis point each to 2.64% and 4.23%, respectively. The two-year yield fell one basis point to 0.53%.
Treasuries were slightly weaker Monday morning. The benchmark 10-year and 30-year yields rose one basis point each to 2.52% and 3.61%, respectively. The two-year was steady at 0.32%.