NEW YORK – The tax-exempt market was quiet Monday morning after yields last week fell to record lows. Traders looked ahead to what is expected to be one of the larger new-issue weeks in the primary market this year.
“Munis are quiet,” a New York trader said.
The Municipal Market Data scale was not updated Monday morning. But on Friday, the 10-year yield dropped four basis points to 1.75%, remaining eight basis points above its record low of 1.67% set Jan 18. The 30-year yield dropped four basis points to 3.04%, setting a record low as recorded by MMD. The 3.04% yield beat the previous record of 3.05% set May 14. The two-year yield fell one basis point to 0.32%.
Treasuries were weaker Monday morning following a big rally Friday. The benchmark 10-year yield and the 30-year yield each rose five basis points to 1.51% and 2.57%, respectively. The two-year was steady at 0.26%.
In the primary market this week, $9.61 billion is expected to be issued, up from last week’s revised $3.73 billion. In the negotiated market, $7.53 billion is expected to be priced, up from last week’s revised $1.96 billion. On the competitive calendar, $2.08 billion is expected to be auctioned, up from last week’s revised $1.77 billion.
In the negotiated market today, Goldman, Sachs & Co. is expected to hold its first day of retail pricing for $800 million of New York City Transitional Finance Authority future tax-secured and tax-exempt subordinate bonds in two series. The bonds are rated Aa1 by Moody’s Investors Service and AAA by Standard & Poor’s and Fitch Ratings
On the competitive calendar, Ventura County, Calif., is expected to auction $140 million of short-term notes, rated M1G-1 by Moody’s and SP-1-plus by Standard & Poor’s.