NEW YORK — The municipal market started the morning firmer — words that haven’t been written in roughly three weeks.
Yesterday’s new issuance did better than the concessions in price showed. And traders note that offerings in the secondary are starting to disappear.
Also, the green of falling yields on Treasury screens is adding some confidence, as well, a trader in Florida said.
“All indications are that yesterday’s deals were priced to go and saw overwhelming interest from buyers,” he said. “It’s all a welcome sight. At this point, some guys have felt that they can tuck away their underwater positions and wait for the market to improve and slowly come back out because we’re starting to see the offer sides in the secondary disappear.”
As with the ascent, so with the descent: tax-exempt yields have been following Treasury yields Thursday. They are steady through six years, according to the Municipal Market Data scale. Beyond that, muni yields are flat to two basis points firmer.
The benchmark 10-year muni yield weakened Wednesday. It rose three basis points to 2.58%; it has soared 61 basis points since it reached a record low on Sept. 23.
The two-year yield climbed two basis points on the day to 0.45%. The 30-year yield also increased two basis points, to 3.75%.
Treasury yields started the morning mostly with slight firming. The benchmark 10-year Treasury yield has slipped two basis points to 2.19%. In 10 days, it has soared 40 basis points.
The 30-year has dropped three basis points to 3.17%. The two-year yield remained unchanged at 0.29%.
The industry anticipates a drop in volume this week. Roughly $6.93 billion is expected, on the heels $8.23 billion last week. The negotiated side saw the day’s largest deals.
In economic news, the Labor Department reported Thursday that initial jobless claims decreased slightly to 404,000 on a seasonally adjusted basis for the week ending Oct. 8.
Continuing claims declined to 3.670 million for the week ending Oct. 1. This represents the lowest figure since April 16 when they were 3.659 million.
And the numbers were lower than median estimates from economists polled by Thomson Reuters, albeit barely. They’d anticipated 405,000 initial claims and 3.700 million continuing claims.
The equities markets started the day’s session slightly lower. The major indexes are down by at least 0.17%. The Dow Jones Industrial Average has lost 84 points thus far.
