NEW YORK – The tax-exempt market is weaker in Tuesday morning trading, continuing the trend from Monday as traders expect new issuance to flood the market.
“Munis are a weaker a bit today,” said a trader in New York. “Tuesday is usually a day for new issues so we are looking at the Liberty pricing, and expecting MTA and Puerto Rico,” he said, referring to the $700 million New York Liberty Development Corp. bonds, the $1 billion Puerto Rico Sales Tax Financing Corp. bonds, and the $484 million New York Metropolitan Transportation Authority bonds.
He added, “munis are off with Treasury market.”
The Municipal Market Data scale was not updated by press time. On Monday, the two-year muni closed at 0.42% for its 18th consecutive trading session. The 10-year yield finished up one basis point to 2.22% and the 30-year yield closed up four basis points to 3.79%.
Treasuries continued to weaken Tuesday morning, following Monday’s lead. The benchmark 10-year yield was up five basis points to 2.02% and the 30-year yield was trading up four basis points to 2.97%. The two-year was steady at 0.27%.
In the primary market, Goldman, Sachs & Co. is expected to price for retail $500 million Connecticut special tax obligation bonds. The bonds are rated Aa3 by Moody’s Investors Service and AA by Standard & Poor’s and Fitch Ratings.
Ramirez & Co. is expected to price for retail $483.9 million of New York’s Metropolitan Transportation Authority transportation revenue bonds. The bonds are rated A2 by Moody’s and A by Standard & Poor’s and Fitch.
In economic news, the consumer confidence index jumped to 56.0 in November from a revised 40.9 in October, the Conference Board said. Economists polled by Thomson Reuters had estimated the index would be 43.0.
