Market Post: Trading Volume Rises as Dealers Unload Leftover Primary

The tax-exempt market traded with yields about flat to Thursday as dealers unloaded to customers in the secondary market bonds left over from new issues priced earlier in the week.

"It's slow but it's mostly unloading of the primary bonds," a Chicago trader said. Trading volume was up 16% relative to the average of the past five Friday trading sessions, with sell trades to customers making up $1.96 billion. Interdealer trading volume was $922 million followed by customer sell trades at $702 million.

On Thursday, the triple-A Municipal Market Data scale ended as much as four basis points weaker. The 10-year and 30-year yields rose four basis points each to 2.66% and 4.16%, respectively. The two-year closed unchanged for the sixth session at 0.33%.

Yields on the Municipal Market Advisors benchmark scale ended as much as four basis points higher for a second straight session. The 10-year yield rose three basis points to 2.72% and the 30-year yield climbed four basis points to 4.37%. The two-year was steady for the fourth session at 0.38%.

The Treasury yield curve flattened as yields on the short-end rose and yields on the long-end fell. The two-year yield rose two basis points to 0.30%. The benchmark 10-year yield fell three basis points to 2.76% and the 30-year yield dropped five basis points to 3.84%.

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