The municipal bond market was unchanged to slightly firmer yesterday in moderate trading, as economic data came in mixed. “There seems to be some inquiry but not a lot,” a trader in New York said. “Institutionally it’s quiet and I think it’s because you have a Street that doesn’t have much inventory so there is not a lot of pressure on them. Retail is still pretty good and will stay consistent with us running at about 90% to Treasuries.”Participants said a light new issue calendar is keeping yields within narrow ranges. “We definitely underperformed Treasuries Wednesday and outperformed them Thursday, now that Treasuries have finished flat,” a trader in Los Angeles said. The market was mixed to flat on the long end, but it was essentially unchanged.”Trades reported by the Municipal Securities Rulemaking Board yesterday were narrowly mixed. Bonds from an interdealer trade of insured Connecticut Health and Educational Facilities Authority 5s of 2016 yielded 3.66%, up one basis point from where they traded Wednesday. A dealer sold to a customer insured El Paso County Community College District 4s of 2009 at 3.09%, up one basis point from where they traded Wednesday. A dealer sold to a customer Minnesota Housing Finance Agency 4.85s of 2031 at 5.22%, down three basis points from where they sold Wednesday.The Treasury market yesterday was unchanged to slightly firmer. The yield on the benchmark 10-year Treasury note, which opened at 3.90%, was quoted near the end of the session at 3.89%. The yield on the two-year note closed at 2.82%, after opening at 2.88%. In economic data yesterday, initial jobless claims for the week ended Dec. 29 fell to 336,000, after revised claims of 357,000 the previous week. Continuing jobless claims for the week ended Dec. 22 rose to 2.761 million, after a revised level of 2.415 million the week before. Also, factory orders for November rose 1.5%, after a revised gain of 0.7% the previous month, while factory orders excluding autos rose 1.4%, after revised growth of 0.7% the previous month. Economists polled by IFR Markets had predicted 345,000 initial claims, 2.675 million continuing claims, growth of 0.5% for factory orders, and a 0.6% gain in factory orders excluding transportation. “All of the data we have in hand right now are consistent with slow growth in the economy but would not indicate recession,” said Dean Maki, chief U.S. economist at Barclays Capital. “We have seen a rise in both initial and continuing claims in recent weeks, and that is consistent with slower growth in the fourth quarter.”“With the factory orders number, we were looking for the 1.6% increase — it came in at 1.5% — and that was largely because of price effects,” Maki added. “I wouldn’t read a whole lot into that number as far as real activity, petroleum prices surged on the month and petroleum orders surged.”In the new issue market yesterday, Lehman Brothers priced $115 million of pollution control revenue bonds for the Development Authority of Burke County, Ga., in four series. The bonds in all series mature in 2032, priced at par, with a coupon of 3.75%. All bonds are subject to mandatory tender in 2012. The bonds are rated A2 by Moody’s Investors Service, A by Standard & Poor’s, and A-plus by Fitch Ratings.

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