NEW YORK – The rally in the tax-exempt market appeared to halt Thursday morning as trades in the secondary started to slow. Traders said that overall for the week, deals in the primary market saw good reception.
“Yesterday and today have been very quiet in the secondary,” a New York trader said. “Primary deals are still getting a good response.”
Munis were flat to slightly weaker Thursday morning, according to the Municipal Market Data scale. Yields inside six years were steady while eight- to 23-year yields rose up to two basis points. Outside 24 years, yields were flat.
On Wednesday, the two-year yield finished steady at 0.36% for its ninth consecutive trading session. The 10-year yield closed flat at 2.08% while the 30-year yield was steady at 3.37%.
Treasuries were stronger Thursday morning. The benchmark 10-year yield fell four basis points to 2.16% while the 30-year yield dropped three basis points to 3.27%. The two-year was steady at 0.34%.
In the primary market, Barclays is expected to price $100 million of Development Authority of Fulton County, Ga., revenue bonds, rated Aa1 by Moody’s Investors Service and AA-plus by Standard & Poor’s.
In economic news, final real gross domestic product increased at an annual rate of 3% in the fourth quarter 2011, coming in right at analyst expectations. It was the largest quarterly increase since the third quarter of 2007, when GDP also rose 3%.
“On the face of it, the second revision to GDP was entirely unremarkable,” wrote economists at RDQ Economics. “However, the details are far more interesting because the income data within the GDP report have, on balance, been stronger than the expenditure data since the recovery began. Though far from gangbusters, perhaps the recovery isn’t as weak as Chairman Bernanke has been describing.”
In other economic news, seasonally adjusted initial jobless claims fell 5,000 to 359,000 for the week ending March 24, the lowest level since April 19, 2008. The 359,000 initial claims were higher than the 350,000 estimated by economists.
Continuing claims fell to 3.340 million for the week ending March 17, the lowest since August 9, 2008, when there were 3.330 million claims. The claims were lower than the 3.350 expected by economists.
“The new seasonal adjustment factors have revised up the level of jobless claims in the first quarter of 2012 but they have not revised away the essential message of the report – the labor market and job creation appears to have strengthened significantly in the first quarter of the year,” RDQ economists wrote.
