With most of the new issues priced earlier in the week, the tax-exempt market took a breather Thursday morning and traded slightly firmer in the secondary market.
One last major deal in the competitive market – New York’s Nassau County – priced in the morning and traders eyed indications of interest on $60 million of Saginaw County, Mich., general obligation limited tax pension obligation bonds as a measure of Detroit contagion.
“It’s quiet but a firm tone,” a New York trader said, adding munis are taking a breather after the last few days. “There is not as much supply in the pipeline today and Treasuries are up.”
In the competitive market, JPMorgan won the bid for $128.1 million of New York’s Nassau County general obligation bonds, rated A2 by Moody’s Investors Service, A-plus by Standard & Poor’s, and A by Fitch Ratings.
Yields ranged from 0.81% with a 4% coupon in 2015 to 5.08% with a 5% coupon in 2043. The bonds are callable at par in 2023.
Wednesday, yields on the Municipal Market Data scale ended as much as one basis point higher. The 10-year and 30-year yields were flat at 2.73% and 4.28%, respectively. The two-year finished flat at 0.43% for the 16th consecutive session.
Yields on the Municipal Market Advisors scale were flat to one basis point lower. The 10-year and 30-year yields were steady at 2.90% and 4.34%, respectively. The two-year yield fell one basis point to 0.54%.
Treasuries were steady to one basis point firmer Thursday morning after posting gains Wednesday. The benchmark 10-year and 30-year yields slid one basis point each to 2.59% and 3.67%, respectively. The two-year was steady at 0.31%.
In economic news, jobless claims rose 5,000 to 333,000 for the week of August 3, less than the 336,000 expected by economists.
“We are now moving past the period during which claims are more volatile than usual due to summer factory retooling shutdowns and this report should provide a clearer picture of underlying labor market conditions,” wrote economists at RDQ Economics. “The four-week average of claims has fallen in the latest week to the lowest level since November 2007. If this lower level of claims is maintained into the August employment survey week, this report would imply stronger net job creation than that reported for July.”