The tax-exempt market was steady to firmer Friday morning as activity started to slow down ahead of the weekend.
Still, some traders said the market was moving. "It's flat, but actually some people might say it's higher," a New York trader said. "But I got guys hitting bids."
On Thursday, the 10-year Municipal Market Data yield dropped four basis points to 1.81% while the 30-year yield plummeted six basis points to 2.95%. The two-year closed at 0.29% for the 21st straight session.
The gains on Thursday pushed muni yields back down to levels not seen since August 14 when the 10-year closed at 1.80% and the 30-year finished at 2.95%.
Treasuries were stronger for the fourth consecutive session. The benchmark 10-year yield and the 30-year yield fell one basis point each to 1.66% and 2.78%, respectively. The two-year yield dropped one basis point to 0.27%.
In economic news, new orders for manufactured durable goods rose 4.2%, or $9.8 billion, to $230.7 billion in July. The increase was the largest since December when new orders rose 5.1%. The rise also beat out analyst expectations of a 2.4% gain.
"The headline surge in orders in July was fueled by aircraft and autos and masks underlying weakening in manufacturing orders," wrote economists at RDQ Economics. "Durable goods orders are volatile and, as highlighted by the June data, subject to massive revisions. However, both the underlying durable goods orders data and the manufacturing ISM orders series point to contracting order levels. This red flag suggests that manufacturing, which had been the mainstay of the recovery, could slow sharply over the coming months and hinder the economy's ability to pick up from its paltry sub-2% growth rate recorded over the first two quarters of the year."