Yields on municipal bonds rose Thursday morning after the U.S. government reported fewer jobless claims than were expected by economists.
Initial jobless claims fell 26,000 to 323,000 claims in the week ended March 1, beating the 338,000 average of economists polled by Thomson Reuters, according to data from the Labor Department, released Thursday.
Many in the marketplace attributed high claims in the past month to harsh winter weather that hit much of the Eastern U.S.
The week's biggest deal, $1.15 billion of Texas Transportation Commission State Highway refunding bonds, was priced for retail Thursday.
Yields on the Piper Jaffray-led bonds ranged from 0.48% with a 4.75% coupon in 2017 to 3.57% with a 5% coupon in 2034. The bonds are callable at par in 2024.
New issuance this week has given participants the opportunity to buy, even while the market continues to weaken from Tuesday, when bonds hit the most expensive levels since 2011. Heavy cash reserves and a lack of new supply have helped keep yields low on new issuance so far this year.
"Although new issue volume at about $5.5 billion is higher this week than in February weeks, the forward calendar remains modest, with $2.8 billion Puerto Rico listed for next week, accounting for more than half of next week's slate," Janney Capital Markets said in a report Thursday.
Municipal bond yields measured by Municipal Market Data's AAA scale were up as much as two basis points Thursday. Treasury yields were higher as well, with the 30-year climbing five basis points to 3.68%, while 10-year benchmark yields grew the same amount to 2.74%. Two-year notes gained two basis points to 0.36%.
