The municipal bond market is on track to post a gain in September its first after four months of losses.
Starting in May, the 10-year and 30-year Municipal Market Data yields have been steadily increasing on a monthly basis, but numbers for September will reverse that streak with yields ending nearly 50 basis points lower than where they started the month.
The 10-year yield fell 48 basis points during the month through Sept. 27 while the 30-year yield fell 38 basis points. The last time the market posted gains was in April, when the 10-year yield slid 20 basis points and the 30-year yield dropped 25 basis points.
And light new issue supply this week should continue to be a positive for the market with demand outweighing supply. The market can expect $3.46 billion in new issues, down from last week's revised $4.37 billion. The negotiated market can expect $2.94 billion, down from last week's revised $3.76 billion. In competitive sales, $522.3 million should be auctioned, down from last week's revised $610.6 million.
Monday morning, munis opened the last trading session of the month and third quarter on a quiet note, with few deals pricing and the threat of a government shutdown keeping buyers cautious. "It's very quiet," a New York trader said. "There is not much going on with the quarter-end on the horizon and it's a typical Monday."
On Friday, yields on the triple-A Municipal Market Data scale ended unchanged. The 10-year and 30-year yields were steady for the third session at 2.54% and 4.11%, respectively. The two-year was steady at 0.36% for the sixth session.
Yields on the Municipal Market Advisors scale ended steady. The 10-year and 30-year yields were unchanged at 2.70% and 4.25%, respectively. The two-year was steady at 0.54% for the seventh consecutive trading session.
Treasuries were steady Monday morning, despite threats of a government shutdown as the deadline approaches at midnight tonight. The benchmark 10-year and 30-year yields were steady at 2.63% and 3.69%, respectively. The two-year was steady at 0.34%.