Market participants were not fazed by the positive economic data in the employment report released on a low volume summer Friday.
"I don't think the employment numbers are having an effect on how people are looking at munis today," a New York trader said.
The report states that payrolls rose 209,000 in July and the June-May revision ranked in at plus-15,000, while the unemployment rate declined 0.1-point to 6.2%.
"It's hard to say being that there's not a lot of trading," a second New York trader said. "From what I've seen things are unchanged from yesterday."
Muni yields weakened Friday, with yields on bonds on both the short and long ends of the curve climbing as much as one basis point. Yields on the intermediate part of the curve jumped as much as two basis points, according to the Municipal Market Data's triple-A scale.
"There's not much of a reaction from the market," the first New York trader said. "There's very quiet activity. The adjustments to the MMD scale look like cuts and are heading in the opposite direction. Munis may be getting ahead of themselves."
The jobs report was the final piece of the puzzle this week for clues whether the economy is indeed strengthening.
"Supply is still too tight for GDP alone to truly impact anything," said a New York based trader. "Supply and demand is the most important factor keeping the market in right now."
While economic data may have been heavy this week, the issuance calendar was light and Friday will be no exception.
The largest deal expected to enter the negotiated market next week is led by Citigroup for $594 million of Rhode Island Tobacco bonds, followed by $575 million of Illinois Finance Authority bonds.
