Municipal bonds were steady Thursday morning as yields remained at higher levels than the previous week, when tax-exempt bonds rallied.
"The market advanced pretty well with January reinvestment cash and dealers restocking their shelves after the holidays, and we took a pause yesterday," one Florida-based trader said in an interview Thursday. "When Treasuries backed off traders sympathized with that, but today the back end is probably a couple basis points off. Traders and customers think there could be some continued flattening."
Yields on municipal bonds were mostly steady at the front of the curve, according to a trader in New York. Municipal investors were largely receptive to primary market issuance this week, traders said, with the biggest deal, a New York City Transitional Finance Authority issue, received well.
"Pricing on the TFA deal is going very well and once that deal clears we might see a little more advancement," the Florida-based trader said.
Other deals, including New Jersey transit bonds and New York Dormitory Authority bonds, were trading up a few basis points, the trader said.
Treasury yields strengthened Thursday morning, with the benchmark 10-year yield down three basis points to 2.85% and the 30-year yield down five basis points to 3.77%. The two-year yield remained unchanged at 0.39%.
Yields on the Municipal Market Data triple-A scale were steady from five years in, with as much as a two basis point decline on bonds maturing further out.
