Municipal bonds rallied into Thursday morning as weak data, aside from the initial jobless claims report, boosted Treasuries.
Initial jobless claims for state unemployment benefits was less than expected in the January 18 survey week, the Labor Department reported Thursday. Claims rose by 1,000 to 326,000, compared with expectations of a jump to 330,000 from the prior week's 326,000 level. Existing home sales and leading economic indicators also came in below target.
Muni bond yields continued to rally, carrying over momentum from built from the reception of new bonds issued Wednesday.
"Municipal to Treasury ratios moved lower, with the 10-year hitting 90%, a level last seen a year ago," Janney Capital Markets said in its daily report Thursday.
Goldman, Sachs & Co. is scheduled to price $167.9 million of California-based ABAG Finance Authority revenue bonds for non-profit Sharp HealthCare on Thursday. The bonds are rated A1 by Moody's and AA-minus by Standard & Poor's.
Bond sales this week are expected to increase again, with anticipated new issue volume should weigh in at $5.00 billion, compared with $3.81 billion last week.
Yields on the Municipal Market Data triple-A scale strengthened across the curve, with bonds on the long end of the curve firming the most. Tax-exempt yields for credits maturing after 2041 saw a cut of as much as three basis points.
Treasury yields slid across the curve, with 10-year and 30-year yields sliding five basis points to 2.81% and 3.71%, respectively. The two-year fell two basis points to 0.39%.
