NEW YORK – The shelf life for bonds this week is shorter as traders look to sell after making a big push to buy them earlier in the week.
“Traders are cutting bonds,” said a trader in New York, referring to prices. “They are trying to get rid of them before year-end.” He added that the price cuts come at an odd time. “It’s weird because a lot of it is the new issue stuff they just bought. They bought deals this week and are cutting them already. So maybe they are getting some rumors of deals coming in the pipe that are not on the calendar yet.”
Currently on the calendar for next week is $905.2 million of new issuance, including $365.5 million in negotiated deals and $539.8 million in competitive sales. That compares to a revised $3.58 billion that was issued this week.
On Friday morning, munis were steady across the curve, according to the Municipal Market Data scale.
On Thursday, the two-year muni yield closed flat at 0.36% for its seventh consecutive trading session. The 10-year yield finished steady at 1.94%. The 30-year yield fell one basis point to 3.63%.
Treasuries were firming as the benchmark 10-year and 30-year yields each fell three basis points to 1.88% and 2.89%, respectively. The two-year yield was steady at 0.25%.
In economic news, the consumer price index was unchanged for November after falling 0.1% in October, the Labor Department said. Core consumer prices, which exclude food and energy, were up 0.2% for the month.
Economists had predicted each would rise 0.1%.
“Although the Fed has switched its inflation focus to the moderation in headline consumer inflation, we note that core inflation has risen on a year-over-year basis for 13 consecutive months and is now slightly ahead of the Fed’s informal target range,” wrote economists at RDQ Economics. “We remain far more concerned than the Fed about the eventual inflation consequences of the current setting of monetary policy.”
