NEW YORK — The largest new issuance week of 2011 has mostly come to a close. But the fallout hasn’t energized the secondary market much with leftover paper on the Street.
Most of the action, as Friday pushes into the afternoon, continues to be farther out along the curve, said a trader in New York.
“There’s very little action in the secondary,” he said. “There are a few bits and pieces trading. We have a few situation trades going, but mostly on the long end, at 30 years on out.”
In the middle ground, around 2015 to 2020, there is no buying, the trader added. Debt in the 6- to 10-year period sits. “It’s expensive,” he added.
Muni yields remain steady across all but the long end of the curve, according to the Municipal Market Data scale. Bonds maturing after 2033 are flat to one basis point lower.
The benchmark 10-year tax-exempt yield rose Thursday after holding steady for seven straight trading sessions. It climbed two basis points to 2.68%.
The 30-year yield also weakened, rising three basis points on the day to 4.35%. The two-year yield held at 0.40% for an eighth consecutive session, its low for the year.
Treasury yields headed into the afternoon mostly firmer across the curve, after weakening all of Thursday. The 10-year yield dropped two basis points to 2.99%.
The 30-year yield also fell three basis points to 4.28%. The two-year yield held steady at 0.40%.New issuance was clearly the story this week. When all was said and done, it was estimated to have totaled roughly $8.3 billion, making it the largest volume for new debt offerings this year.
Estimates for next week’s volume show a decrease in new deals. About $4.1 billion in new issuance is expected.
