The market for municipal bonds slowed Monday after a busy week that saw healthy demand for a large slate of new issues.
Estimates for the coming week's volume show a lighter offering of new issues than last week's heavy calendar. Potential muni bond volume on the week should total $2.59 billion, from sales of about $10.63 billion last week, per Ipreo, The Bond Buyer and Thomson Reuters.
"It's pretty slow with some bids out there that are pretty good," a New Jersey-based trader said in an interview. "We're trading at relatively decent levels with markets up not more than a basis point."
Traders agreed that the most interesting deals in this week's supply are coming from the competitive side. Competitive deals scheduled this week include $525 million of Massachusetts general obligation bonds, as well as $61 million of Marietta, Ga., taxable GOs.
Muni participants are also awaiting the Federal Reserve's, federal open market committee statement, scheduled for Wednesday. It is expected that the Fed will discuss whether or not a slowdown of its asset purchase program is in order.
Yields on the Municipal Market Data triple-A scale Monday were firmer throughout most of the curve, including as much as a two-basis-point drop in yields on bonds with maturities from 2024 to 2035. Bonds maturing from 2019 to 2023, as well as from 2036 to 2043, saw yields fall a basis point. Yields on bonds from 2018 and in remained steady.
Treasury yields gained from early Monday morning. The benchmark 10-year and 30-year yields gained three basis points from 2.85% to 2.88%, and from 3.86% to 3.89%, respectively. The two-year yield held steady at 0.33%.