NEW YORK – The tax-exempt market started off slowly Monday morning as traders wait for primary issuance to provide a jump start.
“Munis are steady and trading activity is slow,” a New York trader said.
Munis were steady Monday morning, according to the Municipal Market Data scale. On Friday, the two-year yield finished steady at 0.36% for its tenth consecutive trading session. The 10-year yield and the 30-year yield each jumped two basis points to 2.11% and 3.39%.
Treasuries were stronger across the board. The two-year yield fell one basis point to 0.33% while the benchmark 10-year yield dropped three basis points to 2.19%. The 30-year yield fell four basis points to 3.32%.
In the primary market this week, the tax-exempt market can expect $5.78 billion in bonds, up from last week’s revised $4.34 billion. On the negotiated calendar, $4.06 billion is expected, up from last week’s revised $3.49 billion. In competitive deals, $1.72 billion is expected this week, up from last week’s revised $849.2 million.
Monday, Bank of America Merrill Lynch is expected to price for retail $1.1 billion of New Jersey Economic Development Authority cigarette tax revenue refunding bonds, rated Baa1 by Moody’s Investors Service and BBB-plus by Standard & Poor’s and Fitch Ratings. Institutional pricing is expected Tuesday.
In economic news, the Institute for Supply Management said the U.S. economy grew for the 34th straight time, as the ISM index climbed to 53.4 in March from 52.4 in February. The reading beat analyst expectations of a climb to 53.