Municipal bond traders are set for a quiet day on Thursday, one day after the Federal Open Market Committee raised its fed funds target rate by 25 basis points to between 0.50% and 0.75%.
Secondary Market
U.S. Treasuries were weaker on Thursday. The yield on the two-year Treasury rose to 1.30% from 1.23% on Wednesday as the 10-year Treasury yield gained to 2.62% from 2.52%, while the yield on the 30-year Treasury bond increased to 3.19% from 3.15%.
Top-rated municipal bonds finished mixed on Wednesday. The yield on the 10-year benchmark muni general obligation was unchanged from 2.37% on Tuesday, while the yield on the 30-year dropped two basis points to 3.16% from 3.18%, according to the final read of Municipal Market Data's triple-A scale.
On Wednesday, the 10-year muni to Treasury ratio was calculated at 94.0% compared to 95.6% on Tuesday while the 30-year muni to Treasury ratio stood at 100.3% versus 101.1%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 52,723 trades on Wednesday on volume of $15.78 billion.
Primary Market
The new issue market is getting ready to wind down for the week on Thursday.
Barclays Capital still may price the Chicago Board of Education's $500 million of dedicated capital improvement tax bonds sometime this week.
There is no exact date for the sale, with the timing on the deal dependent on market conditions.
The bonds are rated A by Fitch Ratings and BBB by Kroll Bond Rating Agency.
Ziegler is expected to price the Tarrant County Cultural Education Facilities Finance Corp., Texas' $130 million of Series 2016 A&B retirement facilities revenue bonds.
Additionally, Citigroup is expected to price the New York State Housing Finance Agency's $223 million of affordable housing revenue bonds. The issue is comprised of Series 2016H climate bond certified green bonds and Series 2016I revenue bonds. The deal is rated Aa2 by Moody's Investors Service.
Jefferies is expected to price the Westchester Tobacco Asset Securitization Corp., N.Y.'s $178.83 million of taxable Series 2016A tobacco settlement senior bonds and taxable Series 2016C tobacco settlement subordinate bonds.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $909 million to $6.79 billion on Thursday. The total is comprised of $1.28 billion of competitive sales and $5.51 billion of negotiated deals.
Tax-Exempt Money Market Fund Outflows
Tax-exempt money market funds experienced outflows of $360.4 million, bringing total net assets to $130.60 billion in the week ended Dec. 12, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $870.9 million to $130.96 billion in the previous week.
The average, seven-day simple yield for the 237 weekly reporting tax-exempt funds was increased to 0.17% from 0.16% from previous week.
The total net assets of the 863 weekly reporting taxable money funds increased $19.94 billion to $2.592 trillion in the week ended Dec. 13, after an inflow of $4.58 billion to $2.572 trillion the week before.
The average, seven-day simple yield for the taxable money funds increased to 0.17% from 0.15% from the previous week.
Overall, the combined total net assets of the 1,100 weekly reporting money funds rose $19.58 billion to $2.723 trillion in the week ended Dec. 13 after inflows of $5.45 billion to $2.703 trillion in the prior week.
