NEW YORK - The municipal market had a sleepy start on Friday morning, mostly unchanged as traders anticipated the long holiday weekend.
Yields were down by one basis point along the curve however, there was little direction.
“There is so little volume it’s hard to quantify, but the overall tone is positive,” said a New York trader.
Tax-exempt yields were unchanged across the curve on Friday morning, according to Municipal Market Data.
The two-year, 10-year, and the 30-year triple-A yields each closed Thursday’s session flat at 0.33%, 1.83%, and 3.14% -- unchanged from where they also closed on Wednesday.
“It’s very, very, very quiet and not a lot going on,” according to another New York trader. “It really is dead,” he said.
There were no large new issues priced Friday morning in the primary market, after digesting a glut of new issuance earlier in the week.
The $949.5 million New York City general obligation deal – which anchored the week’s activity – was freed to trade.
There was also no visible pulse in the secondary market early Friday morning, as traders and investors were focused on the long holiday weekend instead. “Everyone wants to get the heck out of here,” one trader said.
Treasury yields showed some strength to start Friday morning after closing slightly weaker on Thursday. The benchmark 10-year Treasury yield ticked down two basis points to 1.75%, while the 30-year declined three basis points to 2.83%. The two-year benchmark, meanwhile, also fell two basis points to 0.29%.
Muni ratios to Treasuries continue to be relatively attractive.
Friday’s triple-A muni scale in 10 years was at 104% of comparable Treasuries and 30-year munis were at 110.2%, according to Municipal Market Data. In addition, 30-year tax-exempt triple-A GOs were at 121.7% of the comparable London Interbank Offered Rate, according to MMD.
Visible Supply
The Bond Buyer’s 30-day visible supply rose by $811.1 million to $6.67 billion. The total is comprised of $2.70 billion in of competitive deals, and $3.96 billion of negotiated bonds.
Previous Session’s Activity
The Municipal Securities Rulemaking Board reported 42,427 trades of 15,392 issues for volume of $14.82 billion. Most active was Washington Health Care Facilities Authority revenue bonds for Seattle Children’s Hospital, which traded 156 times at a volume of $29.71 million. The bonds, which are rated Aa3 by Moody’s Investors Service and AA by Fitch Ratings, traded at a high of 4.24% and a low of 3.88%.
In economic news, U.S. consumer sentiment rose to its highest level in more than four years in May as Americans stayed optimistic about the job market, while higher income households expected to see bigger wage increases, a survey released on Friday showed.
The Thomson Reuters/University of Michigan's final reading on the overall index on consumer sentiment rose to 79.3 from 76.4 in April, topping forecasts for a 79.0 level, and an initial May reading of 77.8. It was the highest level since October 2007.
