Tax-exempt municipals remained quiet on Tuesday even as some investors looked to sell unwanted bonds before getting a fresh start in the New Year. Offers to sell will be prevalent as the year comes to a close and investors try to get out of certain positions, traders pointed out.
"There are a lot of customer lists with some bid-wanteds out," a trader on the west coast said in an interview. "There might be a little year-end liquidation going on with people getting ready to close their books, and that may produce some pressure on the market."
With a much smaller slate of new issue bonds this week compared to the $10.63 billion of sales last week, market participants are focusing on an upcoming Federal Open Market Committee announcement Wednesday.
Estimates for the coming week's volume show a lighter offering of new issues, with potential muni bond volume on the week expected to be $2.59 billion according to data from Ipreo, The Bond Buyer and Thomson Reuters.
Several issues on the negotiated calendar this week top $100 million, including $283 million of Pennsylvania Economic Development Financing Authority parking revenue bonds, which Guggenheim Securities priced for institutions Tuesday morning.
In the competitive market, Massachusetts auctioned $525 million of general obligation bonds on Tuesday, with Bank of America Merrill Lynch winning the bid.
Yields on the Municipal Market Data triple-A scale Monday were mixed throughout the curve, including as much as a two-basis-point rise in yields on bonds with maturities from 2041 to 2043. Bonds maturing from 2038 to 2040 saw yields jump a basis point, while those maturing in 2021 fell a basis point. Yields on bonds in from 2020 remained steady, as did those maturing from 2022 to 2037.
The benchmark 10-year Treasury yield slid one basis point to 2.87%, while the 30-year and two-year yield remained unchanged from Monday at 3.90% and 0.33%, respectively.