The municipal market remained firm Thursday morning as traders looking at a small new issue calendar awaited Friday's U.S. employment data report.
"It's quiet so far with Treasuries feeling steady and munis firm," one trader in New York said in an interview. "There's not a lot of supply and I think with the payroll number coming out tomorrow some people are waiting to see what's going on."
The U.S. government is set to release its monthly employment situation report Friday. The report, which has showed a declining rate of unemployment, is considered a gauge of economic health that the Federal Reserve will use to determine how to advance tapering of its quantitative easing policy.
"We keep on hearing about higher rates but who knows, it doesn't seem like there's a lot of inflation at this point," the trader said. "I look at supply, which is going to affect me a lot. There's plenty of cash and money out there but there's just not much volume to apply pressure."
Investors will see a light calendar this week. Potential long-term volume is expected to total $1.79 billion, up from a negligible $10.8 million last week.
Yields on the Municipal Market Data triple-A scale Thursday were down by as much as two basis points on bonds maturing from 2019 to 2043. Reads on bonds on the shorter end of the curve were not available.
Treasury yields were steady to firmer Thursday morning. The 10-year and 30-year yields each slid one basis point to 2.99% and 3.89%, respectively. The two-year yield remained unchanged at 0.44%.
