Municipal bond yields were mixed Tuesday morning as investors waited for primary market issuance. Secondary trading continued to offer the best prices on bonds, traders said.
"The market feels like the dealers want to move some bonds," one New York-based asset manager said in an interview. "One gets the impression that the short-term top has appeared and there are some concessions that sellers are willing to give. We're going to see if that's the case when the deals come this week."
Investors have pointed to a supply-favorable market the past month, as the lack of available paper has forced buyers to take bonds at low yields and high prices.
Volume could reach $4.89 billion this week, according to Bond Buyer and Ipreo data. Total bond sales last week came to $4.57 billion, according to Reuters.
"In reality I just can't remember the last new-issue deal that struggled, even going back to [the end of] last year when the market didn't even feel that well," the manager said. "Anytime a deal shows up cheap everyone pounces on it and it goes down."
RBC Capital Markets brought $467.9 million of Minnesota general fund bonds to retail Monday. Raymond James & Associates also offered a retail pricing on $360 million of New York City water and sewer bonds.
Yields on bonds maturing from 2020 to 2044 were up as much as one basis point Tuesday morning, according to Municipal Market Data's AAA scale read. Bonds maturing in 2019 ticked down one basis point in yield.
Treasuries softened Tuesday, with the 10-year and 30-year yields each ticking up one basis point to 2.77% and 3.69%, respectively. The two-year was unchanged at 0.36%.
