The municipal bond market opened the week slowly, with traders expecting minimal activity in light of a miniscule new issue calendar.
Total volume for this week could total $2.65 million, according to data from Ipreo and The Bond Buyer. That breaks down into $1.52 billion of negotiated sales and $1.14 billion of competitive sales. Issuers sold $3.53 billion last week, according to Thomson Reuters.
"Overall it's a quiet Monday with munis few and far between," a trader in Chicago said in an interview. "We're not seeing much flow yet."
The week's biggest deal, a Louisiana competitive deal consisting of $347.2 million of tax-exempt general obligation bonds and $149.3 million of taxable, is set to price Tuesday.
"Since it's the biggest deal of the week we'll watch the Louisiana deal to see where it comes in, and what type of structure that comes on," a New York-based trader said. "Could be fairly aggressive given light supply this week but how much just depends on how things go with the calendar."
Market participants will also be watching Janet Yellen's first public appearance as chair of the Federal Reserve Board. Yellen, who had been vice chair of the board and before that was president of the Federal Reserve Bank of San Francisco, is slated to testify before Congress Tuesday (the House) and Thursday (the Senate) mornings.
"Of course we'll be watching Yellen as well," the Chicago-based trader said. "Tuesday and Thursday that will be the market focus. As we're tapering the purchasing now down by $20 billion, I think the way she approaches the Q&A session will be followed fairly closely by the market."
Yields on municipal bonds were mostly steady Monday, according to Municipal Market Data's AAA scale. Bonds maturing from 2019 to 2022 fell by as much as one basis point in yield.
Treasuries were mixed Monday, with the 30-year slipping two basis points to 3.66% and the 10-year falling by one basis point to 2.68%. The two-year yield gained one basis point to 0.32%.
