Uncertainty about the economy and the direction of interest rates has continued to push money to the sidelines as municipal bond traders said there was a lack of conviction in the market Thursday.

"This morning it picked up a bit but has tailed off," a trader located in the Southwest region said. "It seems like a lot of people are off desks or waiting for direction from the primary. There is also a lot of uncertainty about the economy and Fed policy going forward."

Little direction came from the primary as only a handful of deals priced. Two issuers in Virginia led the way. Citi won the bid in the competitive market for $148.1 million of Virginia Public School Authority school financing bonds, rated double-A-plus by Standard & Poor's and Fitch Ratings and Aa1 by Moody's Investors Service.

Yields ranged from 0.25% with a 3% coupon in 2014 to 3.36% with a 3.5% coupon in 2033. The bonds are callable at par in 2023.

Also in Virginia, Bank of America Merrill Lynch priced $101.4 million of triple-A rated Virginia Housing Development Authority taxable mortgage bonds. The bonds were priced at par to yield 2.75% in 2042.

Also in the negotiated market, Piper Jaffray priced $132 million of Golden Empire Schools Financing Authority, Calif., short-term bonds for the Kern High School District project. The bonds are rated MIG-1 by Moody's and SP-1 by Standard & Poor's. The bonds were priced at par to yield 0.52% in May 2014.

Municipal bond scales ended steady to one basis point weaker Wednesday after a similar read Tuesday.

Yields on the Municipal Market Data 5% triple-A GO scale as much as one basis point weaker. The 10-year was steady at 1.70% for the sixth session and the 30-year closed unchanged at 2.90% for the fourth trading session. The two-year closed steady at 0.29% for the 14th session.

Yields on the Municipal Market Advisors 5% scale also ended flat to one basis point higher. The 10-year yield rose one basis point to 1.77%. The 30-year closed unchanged at 3.02% for the fifth session and the two-year was flat at 0.32% for the 14th session.

Treasuries continued to weaken Thursday afternoon. The benchmark 10-year yield increased two basis points to 1.72% and the 30-year yield rose three basis points to 2.92%. The two-year was steady at 0.24%.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.