Market Post: Yields Slightly Weaker on Modest Activity

Few municipal bonds are out for the bid Monday, lending a weaker tone to tax-exempt yields.

Traders have seen little activity this morning, while Treasury yields have strengthened across the curve.

Market participants expect little help from the calendar; they anticipate light volume this week, and even into the following week, a trader in New York said.

"I haven't seen any real strength today," he said. "I've seen a lot of markets being quoted, maybe stuff they had on Friday they're trying to get going today, without a lot of success. If anything, maybe it's a little weaker."

Potential long-term volume for the week is expected to total $1.79 billion, up from sales of $10.8 million last week. That breaks down into $869.3 million scheduled for negotiated sale and $918.2 million set for auction among competitive deals, Ipreo, The Bond Buyer and Thomson Reuters figures show.

Other market analysts point to a calendar weighing in around $2.5 billion this week. No large deals are expected to arrive Monday.

JPMorgan is expected to price a $240 million deal for the University of Texas, the largest on the negotiated calendar. It is expected to arrive as early as Tuesday. Also, Barclays plans to price $150 million of Massachusetts Development Finance Agency revenue bonds.

On the competitive side of the ledger, the San Francisco Unified School District is scheduled to auction $205 million on Thursday, while the New Jersey Educational Facilities Authority expects to auction $200 million of Princeton University revenue bonds on Wednesday.

Yields on the Municipal Market Data triple-A scale had yet to be updated at press time. On Friday, they held steady throughout the day.

The triple-A, tax-exempt 10-year ended Friday's session unchanged at 2.79%. The 30-year finished flat at 4.20%. The two-year yield held at 0.35%.

Yields on the Municipal Market Advisors benchmark triple-A scale on Friday held steady across the curve. The 10-year triple-A yield remained unchanged at 2.79%, the 30-year at 4.41% and the two-year at 0.37%.

Treasury yields have fallen across the curve Monday. The 10-year yield has dropped two basis points to 2.98%. The 30-year yield has fallen two basis points to 3.91%. The two-year ticked down one basis point to 0.40%.