NEW YORK – The tax-exempt market was active, but steady to stronger Tuesday morning as market participants continued to trade on European news and prepared for a busy day in the new-issue muni market.
“It’s busy this morning,” a New York trader said. “There is a lot of trading.” He added prices aren’t necessarily moving higher, there is just more trading activity.
Munis were steady to stronger, according to the Municipal Market Data scale. Yields inside five years were steady while yields outside six years fell between one and three basis points.
On Monday, the two-year yield closed flat at 0.31% for the 14th consecutive trading session. The 10-year yield and the 30-year yield each fell two basis points to 1.80% and 3.13%.
The 10-year hasn’t hit 1.80% since Feb. 6 when it yielded 1.79%. The 30-year beat its previous record low of 3.14% last hit on Feb. 2 and originally set Jan. 31.
Treasuries were much stronger Tuesday morning. The benchmark 10-year yield fell three basis points to 1.85% while the 30-year yield dropped four basis points to 3.03%. The two-year was steady at 0.27%.
In the primary market, Siebert Brandford Shank & Co. is expected to price $400 million of Chicago second-lien water revenue bonds. The bonds are rated Aa3 by Moody’s Investors Service, AA-minus by Standard & Poor’s and AA by Fitch Ratings.
Citi is expected to price $160 million of Norfolk City, Va., Economic Development Authority revenue and refunding bonds, rated Aa2 by Moody’s and AA by Standard & Poor’s.
In the competitive market, Massachusetts is expected to auction $419.3 million of Commonwealth Transportation Fund revenue bonds for the Accelerated Bridge Program, rated triple-A.
Cedar Rapids, Iowa, is expected to auction a total of $107.1 million of general obligation and revenue bonds divided into six series, including $5.83 million, $11.64 million, 11.81 million, $59.57 million, $2.92 million, and $15.33 million.
Knoxville, Tenn., is expected to auction $92.9 million of GOs, rated Aa1 by Moody’s and AA-plus by Standard & Poor’s.