Municipal bond yields dipped Friday morning after a government employment situation report showed payroll jobs rose at a slower pace than expected.
Monthly payrolls in January were up 113,000, missing Wall Street's estimate of 182,000. Revisions to November and December numbers were up just 34,000. The unemployment rate is at 6.6%.
Yields on municipal bonds maturing from 2027 to 2044 were down as much as two basis points, while those maturing in 2018 also lost one basis point, according to Municipal Market Data's AAA scale. Other bonds were steady Friday morning.
"Nonfarm payrolls is the market-moving number," Adam Buchanan, vice president of sales and trading at Ziegler, said Thursday. "We're going to be looking at the revised number from December because it was way off. We're going to look closely at that revision and see where it shakes out."
Treasuries firmed Friday, with the 30-year yield falling one basis point to 3.66%, while the 10-year slid four basis points to 2.67%. The two-year yield also fell, to 0.32%.
"Despite some recent disappointing economic releases, we expect Fed policy to remain on the current path of reducing [quantitative easing]," US Bank Wealth Management said in a report this week. "In our view, U.S. economic data, and in particular the labor market, would have to show sustained weakness before policy makers would respond by pausing tapering."
Volume this week was $3.53 billion of new issues, according to Thomson Reuters. Potential volume next week is estimated to be even lower with just $2.65 billion scheduled.
