NEW YORK The tax-exempt market started its vacation Friday morning as activity stalled and issuance in the primary market plunged for next week.The Municipal Market Data scale was not updated by press time. But on Thursday, the 10-year yield ended flat at 1.86% for the 10th trading session while the two-year ended steady at 0.32% for the 20th straight session. The 30-year yield finished flat at 3.16% for the fifth session.
Treasuries were much weaker Friday. The benchmark 10-year yield and the 30-year yield jumped seven basis points each to 1.65% and 2.74%. The two-year yield rose two basis points to 0.33%.
In next weeks primary market, $57.1 million is expected to come to market, down from this weeks revised $7.86 billion. In the negotiated market, $12 million is on the calendar, down from this weeks revised $6.29 billion. On the competitive side, $39.7 million is expected to be priced, down from this weeks revised $1.57 billion.
In economic news, personal income rose 0.2%, or $25.4 billion, in May following a 0.2% gain in April. The increase was right in line with economist expectations.
Personal spending fell $4.7 billion, or less than 0.1%, in May following a 0.1% gain in April. The drop came in line with economist predictions.
Although lower energy prices have given a boost to real income growth, most of this real income gain, for now, has gone into savings as consumers have been leery of buying big ticket items, wrote economists at RDQ Economics. Consumers need clarity in their personal financial situation for 2013 as large tax increases loom on January 1st.