The municipal market had little momentum to propel it forward to start the week.
Weaker Treasuries and light activity in the secondary market marked a slow early Monday morning. Participants are seeing no bid side from customers, a trader in New York said. And the Street doesn't have a bid for other participants.
"The market's pretty illiquid," he said. "The Street's not necessarily in bad shape. But the market has experienced a reasonable amount of outflows over the past two weeks. That hasn't helped."
Participants' talk of the expected substantial reinvestment of more than $30 billion hasn't materialized.
"You actually have a lot of participants losing money," the trader added. "So, against a backdrop of weaker Treasuries, some supply and customers losing money, it's tough to have a positive day or two."
The Treasury market continues to reel from Friday's employment number. And without Treasuries following through over the weekend from Friday, it will be difficult for the muni market to find its footing, the trader added.
"You're coming off to close to being 45-basis points down the five last trading weeks," he said. "We made a pretty decent correction. But percentages aren't necessarily real attractive. And guys are still concerned about rising rates. That's what we'll be fighting."
Still, a busy primary market is expected for this week, led by an $877 million sale for Rutgers University and an $800 million New York City Transitional Finance Authority financing.
There should be approximately $7.87 billion of new issuance, according to Ipreo LLC and The Bond Buyer. That compares with the revised $4.52 billion that actually came to market last week, according to Thomson Reuters.
Yields on the Municipal Market Data scale ended the week as much as six basis points higher. The triple-A 10-year yield rose two basis points to 2.13% and the 30-year yield leaped six basis points to 3.34%. The two-year was unchanged at 0.30% for the fifth session.
Muni yields on the Municipal Market Advisors 5% scale also closed out as much as six basis points higher. The 10-year yield climbed three basis points to 2.20% and the 30-year yield vaulted six basis points to 3.46%. The two-year held steady at 0.36% for the eighth session.
Treasuries started the week where they ended last week: weaker. The benchmark 10-year yield has jumped six basis points to 2.22%; the 30-year yield has risen five basis points to 3.37%. The two-year yield has inched up two basis points to 0.33%.