NEW YORK – The tax-exempt market continued to weaken for the fourth session this week as demand failed to meet supply and traders resisted low rates.

“Munis are weaker because of supply and rates,” a New York trader said. “There is too much supply and rates are so low.”

He added secondary market trading is very slow as most market participants are focused on the primary.

“It’s not pretty out there,” he said. “And this has been a long time coming.”

Munis continued to weaken Thursday morning for the fourth session, according to the Municipal Market Data scale. Yields inside five years were steady while the six- to eight-year yields rose up to two basis points. Outside 11 years, yields jumped up to three basis points.

On Wednesday, the 10-year yield and the 30-year yield jumped seven basis points each to 1.85% and 3.16%. The two-year was steady at 0.32% for the fourth consecutive trading session.

After rising 10 basis points so far this week, the 10-year yield now remains 18 basis points above its record low of 1.67% set Jan 18. After the 30-year yield jumped 12 basis points so far this week, the yield remains 12 basis points off its record low of 3.04% set on Friday.

Treasuries were mixed Thursday morning. The two-year yield rose one basis point to 0.28% while the 10-year yield fell two basis points to 1.65%. The 30-year was steady at 2.74%.

In the negotiated market, Morgan Stanley is expected to price $844.5 million of Illinois Metropolitan Pier and Exposition Authority bonds in tax-exempt and taxable series, rated AAA by Standard & Poor’s and AA-minus by Fitch Ratings.

The first two tax-exempt series consist of $98.1 million and $734.3 million of McCormick Place expansion project bonds and refunding bonds, respectively. Also expected is a $12 million taxable series of refunding bonds for the McCormick Place expansion project.

Goldman, Sachs & Co. is also expected to price $500 million of Puerto Rico Public Buildings Authority government facilities revenue refunding bonds, rated Baa1 by Moody’s Investors Service and BBB by Standard & Poor’s.

Ramirez & Co. is expected to price $415.6 million of Massachusetts Bay Transportation Authority assessment bonds, rated Aa1 by Moody’s and AAA by Standard & Poor’s.

In economic news, seasonally adjusted initial jobless claims fell 12,000 to 377,000 for the week ending June 2. Continuing claims rose 34,000 to 3.293 million for the week ending May 26.

The initial claims came in right where economists had predicted while continuing claims were above the estimated 3.240 million.

“The unemployment claims data do not suggest to us that the labor market is deteriorating further or that job creation is continuing to slow,” wrote economists at RDQ Economics. “We are still two weeks away from the claims data lining up with the employment survey week but, at this very early stage for making an employment forecast, we would project a pickup in job creation to somewhere in the range of 125,000-150,000.”

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