The tax-exempt market was stronger again Friday morning, riding the wave of a higher Treasury market over the past few sessions.
"There are a lot of crossover buyers and even some retail too," a New York trader said. "Munis are just following Treasuries."
While buying power in the primary market was light earlier this week, sentiment made a shift Thursday morning, pushing yields down as much as seven to eight basis points on the major municipal bond scales.
On Thursday, yields on the triple-A Municipal Market Data scale ended as much as eight basis points firmer. The 10-year yield slipped eight basis points to 2.87% and the 30-year yield dropped five basis points to 4.41%. The two-year was steady at 0.43% for the 41st straight session.
Yields on the Municipal Market Advisors scale ended as much as seven basis points lower. The 10-year yield dropped six basis points to 3.04% and the 30-year yield dropped five basis points to 4.52%. The two-year closed unchanged at 0.55% for the 20th session.
Treasuries were mostly stronger for a third session Friday morning. The benchmark 10-year yield fell one basis point to 2.90% and the 30-year yield dropped two basis points to 3.83%. The two-year yield rose one basis point to 0.45%.
In economic news, producer price index rose 0.3% while the core rate was flat in August, resulting in a 1.4% rise overall and a 1.1% core gain over the year.
In other economic news, retail sales were up 0.2% and sales excluding autos were up 0.1% in August, all less than expected.
