Showing few signs of slowing, the municipal bond market continued to follow Treasuries higher even as the weekend approached.
Coming off of a weaker than expected employment report, munis were stronger from the opening.
"I'm looking at offerings now and showing bids and it seems like everything is firm," a Virginia trader said. "There is not a tremendous amount of activity or trades but those that are posting are strong."
He added the muni rally is driven primarily by a firmer Treasury market. But, positive news out of Puerto Rico, which passed pension reform, helped support the market. "Puerto Rico was a bit of a headwind in terms of muni-specific issues but there have been a couple of decent headlines and Standard & Poor's said it could be a credit positive so it's a double whammy."
Municipal bond scales ended as much as six basis points firmer Thursday after posting gains Wednesday.
Yields on the Municipal Market Data triple-A GO scale ended as much as six basis points lower. The 10-year yield plummeted six basis points to 1.80% while the 30-year yield fell four basis points to 3.03%. The two-year finished flat at 0.31% for the 32nd consecutive session.
Yields on the Municipal Market Advisors 5% coupon triple-A benchmark scale ended as much as four basis points lower. The 10-year yield dropped four basis points to 1.88% and the 30-year yield fell three basis points to 3.14%. The two-year held at 0.33% for the 27th session.
Treasuries continued to gain Friday afternoon. The benchmark 10-year yield plunged eight basis points to 1.68% and the 30-year yield plummeted 14 basis points to 2.85%. The two-year was steady at 0.23%.
