The tax-exempt muni market saw a quiet start to the week Monday morning as traders prepared for a fair amount of incoming deals over the next week.
"We've seen very limited supply the last several weeks, this is the first week of some decent supply," one trader in New York said. "Munis are flat, trade flow is extremely quiet, guys are setting up for the supply. They're taking a breather until that comes in."
The Bond Buyer's most recent 30-day visible supply showed $12.4 billion on the way, including $8.253 billion in potential volume this week. That's almost twice as much as the $4.388 billion introduced in the week ended October 18.
The $8.253 billion of new volume includes $5.669 billion in negotiated sales and $2.585 billion competitive, compared with $3.769 billion and $620 million last week, respectively.
JPMorgan is set to have a retail order period Monday for $1.61 billion of California state general obligation bonds. Traders are also anticipating Goldman, Sachs & Co. to bring $650 million of New York City transitional finance authority bonds Monday and Tuesday.
The municipal market will also be mindful of government data released this week that was previously delayed by a congressional shutdown.
"There's about twenty pieces of data coming," the New York trader said. "Because of the shutdown a lot of the data is going to come in this week. I don't think it will be anything that will necessarily hurt the market, but it won't make it stronger. If anything it may lead to something a little weaker."
Existing home sales figures were released this morning, and the government plans to issue the employment situation report on Tuesday, as well as weekly jobless claims figures on Thursday.
Existing home sales fell 1.9% to a seasonally adjusted 5.29 million-unit rate in September.