The tax-exempt market traded steady Friday morning, as a mostly flat tone extends for the fourth session this week.

While Treasuries are weaker, munis are mostly stable as Friday and next week are seen as the last chance to get trades done before the holiday lull sets in.

In the primary market Friday, Citi is expected to price for retail $850 million of New York City general obligation bonds, rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings. A second retail order period is expected Monday followed by institutional pricing Tuesday.

In next week's primary calendar, the municipal market can expect $11.61 billion to be issued, up from this week's revised $8.99 billion. On the negotiated calendar, $9.45 billion is expected to be priced, up from this week's revised $6.78 billion. In competitive deals, $2.16 billion is expected to be auctioned, down slightly from this week's revised $2.21 billion.

On Thursday, the Municipal Market Data scale ended steady for the third consecutive trading session. The 10-year yield finished flat at 1.48%, one basis point above the 1.47% record low set Nov. 28. The 30-year yield ended unchanged at 2.48%, dangling above its record low of 2.47% set Nov. 28. The two-year finished flat at 0.30% for the 49th consecutive trading session.

Treasuries were weaker on positive employment data. The benchmark 10-year yield and the 30-year yield jumped three basis points each to 1.61% and 2.80%, respectively. The two-year was steady at 0.25%.

In economic news, the November employment report was stronger than expected as non-farm payrolls were up 146,000 and the jobless rate fell to 7.7%.

"It appears that superstorm Sandy had a minimal effect on the recorded data for employment as the November establishment report was very trend-like in character," wrote economists at RDQ Economics. "The 146,000 increase in payrolls was in line with the three-month average of 139,000. The unemployment rate continues to hold below 8% and we can no longer attribute this to volatility but neither can we say it is due to falling participation since the participation rate over the last three months is identical to the average for the three months ended August, but the unemployment rate has dropped to an average of 7.8% from 8.2% on the same basis."

They added, "The unemployment data are painting a brighter picture on the economy than any other data series we can think of and, therefore, are out of sync with other indicators and hard to understand. Our best take is that the economy is growing at a moderate rate at the end of 2012 despite the uncertainties of the fiscal cliff and the impact of Sandy — a testament to the resiliency of the U.S. economy."

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.