After a slow, steady grind higher over the past few sessions following the massive selloff, the tax-exempt market opened steady Tuesday.
A few new issues were expected to price to take advantage of relatively light supply this week, though demand remained lackluster heading into the holiday weekend.
“MUB is up like 0.2% so we will be flat going into the holiday,” a New Jersey trader said. “No trader wants to own bonds over the holiday. We want to be as light as possible.”
This trader added going into the selloff, bonds like Detroit and Puerto Rico were much cheaper. Now, some of those have started to recover. One insured Detroit sewer bond with a 5.75% coupon was trading back up at par, this trader said.
RBC Capital Markets is expected to price for institutions $336.3 million of New York’s Metropolitan Transportation Authority revenue bonds, A2 by Moody’s Investors Service and A by Standard & Poor’s and Fitch Ratings.
In retail pricing Monday, yields ranged from 0.45% with a 4% coupon in 2014 to 4.70% with a 5% coupon in 2043. The bonds are callable at par in 2023. Bonds maturing in 2013 were offered via sealed bid.
In the competitive market, Colorado should auction $500 million of short-term notes, rated MIG-1 by Moody’s and SP-1-plus by Standard & Poor’s.
Monday, yields on the Municipal Market Data scale ended mostly steady across the curve. The 10-year and 30-year yields were steady for the third session at 2.56% and 3.83%, respectively. The two-year was flat at 0.50% for the fourth session.
Yields on the Municipal Market Advisors scale ended mostly flat as well. The 10-year and 30-year yields were flat at 2.72% and 3.95%, respectively. The two-year was steady at 0.53% for the third session.
Treasuries were stronger Tuesday morning. The benchmark 10-year yield slid two basis points to 2.47%. The two-year and 30-year yields dropped one basis point each to 0.35% and 3.47%, respectively.