The tax-exempt market struggled to gain traction Monday morning as traders said the market was still asleep from the weekend.
“It’s dead this morning because of the Jewish holiday,” a New York trader said. “People are at work, but trading is dead.”
In the primary, the municipal market can expect $8.64 billion in bonds, up from last week’s revised $4.04 billion. On the negotiated calendar, $7.64 billion is expected to come to market, up from last week’s revised $2.7 billion. On the competitive side, $998.7 million is expected, up from last week’s revised $1.34 billion.
Later today, King County, Wash., is expected to auction $69.53 million of general obligation bonds, rated Aa1 by Moody’s Investors Service, AAA by Standard & Poor’s, and AA-plus by Fitch Ratings.
On Friday, the 10-year Municipal Market Data yield jumped nine basis points to 1.93% while the 30-year yield soared eight basis points to 3.06%. The two-year closed at 0.29% for the 36th consecutive session.
The 10-year MMD yield is now the highest since April 17, when it yielded 1.95%. The 30-year yield is the highest since July 10 when it touched 3.06%
Treasuries were stronger Monday morning after a big selloff last Thursday and Friday when the Fed announced QE3. The benchmark 10-year yield fell two basis points to 1.85% while the 30-year yield dropped three basis points to 3.06%. The two-year was steady at 0.26%.