Municipal bond market participants will have extremely limited new issuance to work with for the rest of the week and for the year, as most issuers will wait for 2017 before splashing into the market with large deals.
Secondary Market
U.S. Treasuries were stronger on Wednesday morning. The yield on the two-year Treasury was lower at 1.20% from 1.22% on Tuesday, while the 10-year Treasury yield fell to 2.55% from 2.56%, and the yield on the 30-year Treasury bond decreased to 3.14% from 3.15%.
Top-shelf municipal bonds finished Tuesday unchanged, as the yield on the 10-year benchmark muni general obligation was flat at 2.45% from Monday, while the yield on the 30-year was steady at 3.18%, according to a final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 95.6% on Tuesday, compared with 96.7% on Monday, while the 30-year muni to Treasury ratio stood at 101.0%, versus 102.3%, according to MMD.
Primary Market
There are no schedule deals larger than $100 million for the rest of this week.
"Issuance is basically finished for the year now," said a New York trader. "Volumes are around 20% lighter than the last two weeks; there is pretty much no primary action, so all of the action is in the secondary."
It comes as no surprise, since at this time of year it is not unusual to see such minuscule activity.
"Right around this time every year, the market goes into a little hibernation," said a Midwest trader. "Things should start rolling again in the New Year."
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 57,437 trades on Tuesday on volume of $15.977 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $347.1 million to $5.30 billion on Wednesday. The total is comprised of $1.10 billion of competitive sales and $4.20 billion of negotiated deals.
