With most of the primary issuance behind it, the municipal bond market turned its attention to the California deal pricing for institutions Thursday.

Traders said deals this week have done well, though at concessions to previous weeks. The California deal in particular did well for retail, though yields were increased a few basis points in the second retail order period.

And after a two day retail order period, JPMorgan is expected to price for institutions $2.16 billion of California various purpose GOs later Thursday. The bonds are rated A1 by Moody's Investors Service, A by Standard & Poor's, and A-minus by Fitch Ratings.

In the second retail order period Wednesday, yields on the first series, $1.06 billion of various purpose GOs, ranged from 1.19% with coupons of 2.00% and 4.00% in a split maturity in 2018 to 4% priced at par in 2043. Bonds maturing in 2014 were offered via sealed bid. Portions of bonds maturing between 2017 and 2043 were not offered for retail. The bonds are callable at par in 2023. Yields in the series were raised two basis points at the short end from the first day of retail.

Yields on the second series, $1.10 billion of various purpose GO refunding bonds, ranged from 1.19% with a 5.00% coupon in 2018 to 3.69% with a 4% coupon and 3.39% with a 5% coupon in a split 2033 maturity. Bonds maturing between 2014 and 2016 were offered via sealed bid. Bonds maturing between 2027 and 2032 were not offered for retail. The bonds are callable at par in 2023. Yields in the series were raised two basis points at the short end and one basis point at the long end from the first day of retail.

"Retail came in strong with $800 million in orders," a Chicago trader said.

Outside the California deal, traders said the market was quiet. "It's too early to tell," he said. "There are basically no trades so far. With California institutional pricing later, the secondary market has gotten very quiet. With a weaker Treasury market we could have more weakness."

He added that more outflows this week could put additional pressure on the market.

On Wednesday, municipal bond market scales ended weaker for the third session.

Yields on the Municipal Market Data triple-A GO scaled ended as much as two basis points higher. The 30-year yield rose two basis points to 3.11% Wednesday. The 10-year closed steady at 1.99% while the two-year finished flat at 0.31% for the 17th consecutive session.

Yields on the Municipal Market Advisors 5% coupon triple-A benchmark scale climbed as much as two basis points. The 10-year yield and the 30-year yield inched up one and two basis points, respectively, to 2.01% and 3.18%. The two-year held at 0.33% for the 12th session.

Treasuries were weaker Thursday morning. The benchmark 10-year yield jumped three basis points to 2.06% while the 30-year yield rose two basis points to 3.24%. The two-year yield increased one basis point to 0 .28%.

In economic news, initial jobless claims slid 10,000 to 332,000 for the week ending March 9. Continuing claims fell 89,000 to 3.024 million for the week ending March 2. Economists expected 350,000 for initial claims and 3.100 million for continuing claims.

"Many economic forecasts assumed slower growth in the first half of 2013 as a result of fiscal drags from higher tax payments and from cutbacks in government spending," wrote economists at RDQ Economics. "However, the data for the real economy suggest a pickup in growth. The initial jobless claims data suggest that layoffs and firings are now running at their lowest level for the recovery and, particularly in light of the surprisingly strong jobs gain in February, suggests a pickup in the pace of job creation."

In other economic news, the producer price index surged 0.7% in February while the core rate, which excludes food and energy, rose 0.2%. The numbers were on the mark with economists' expectations.

"While we are concerned about the longer-run effects of the Fed's monetary policy and the continued easing through asset purchases in 2013, the short-run inflation trends can hardly be described as alarming," RDQ economists wrote. "Three-month headline and core inflation rates are modestly higher than their 12-month trends but not worryingly so. We read these data as confirming our view that deflation is a completely unfounded fear but they are not yet signaling a significant pickup in inflation."

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