NEW YORK — Municipals on Thursday have been fighting the effects of the moves in Greece, and how its crisis and apparent resolution have affected the bond markets here. Once Greek lawmakers approved the austerity plan to avoid debt default, and Treasury yields started to rise, munis followed suit and should continue to throughout the day, a trader in New Jersey said.
“The fact that there are some arrangements being made [regarding the debt crisis in Greece] basically took the scare off of the table,” he said. “That’s why we’re seeing that flight to quality we saw a week and a half ago dissipate to a certain extent. We’ve followed through with that same level of disinterest in the muni market.”
Muni yields continued to soften, according to Municipal Market Data. Tax-exempts maturing between 2012 and 2015 remain unchanged. Yields for maturities in 2015 and 2026 were flat to two basis points higher. Longer-term yields rose one to three basis points.
The two-year closed at 0.42%, holding for the 13th consecutive day. The 10-year benchmark muni jumped three basis points to 2.70%. The 30-year yield also skipped up three basis points to 4.30%.
After Wednesday’s broader sell-off in Treasuries, yields strengthened to start the day. The 10-year yield fell four basis points to 3.09%. The two-year yield dropped three basis points to 0.45%, and the 30-year yield slipped two basis points to 4.37%.
Still, the secondary market started the day fairly quiet, the trader in New Jersey said. “We’re not seeing very much activity right now.”
In economic news, there was slight improvement on the employment front, though not cause for jubilation. Seasonally adjusted initial unemployment insurance claims decreased 1,000 in the week ending June 25 to 428,000 from the previous week’s unrevised figure of 429,000. The four-week moving average was rose 500 to 426,750 from the previous week’s unrevised average of 426,250.
