Primary action on Wednesday will start to pick up a bit as the municipal bond market gets into gear after a quiet return from the Independence Day holiday.
Traders and issuers will be eying yields, which are at or near record low levels.
Secondary Market
Treasuries were mixed on Wednesday. The yield on the two-year Treasury slipped to 0.55% from 0.56% on Tuesday, while the 10-year Treasury yield rose to 1.36% from 1.33% and the yield on the 30-year Treasury bond decreased to 2.13% from 2.14%.
Top-quality municipal bonds ended stronger on Tuesday.
The yield on 10-year benchmark muni general obligation fell four basis points to 1.30% from 1.34% on Friday, while the 30-year muni yield dropped five basis points to 1.94% from 1.99%, according to the final read of Municipal Market Data's triple-A scale.
Tuesday's read on the 30-year muni yield is another record low on the long end, while the 10-year yield is now only one basis point above its record low of 1.29%.
On Tuesday, the 10-year muni to Treasury ratio was calculated at 95.2% compared to 91.0% on Friday, while the 30-year muni to Treasury ratio stood at 90.8% versus 88.8%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 34,588 trades on Tuesday on volume of $7.01 billion.
Primary Market
The bulk of the week's issuance will be coming on Thursday, but there is one large deal scheduled to hit the market on Wednesday.
RBC Capital Markets is expected to price Chester County, Pa.'s, $97 million of general obligation bonds.
The deal is rated triple-A by Moody's Investors Service, S&P Global Ratings and Fitch Ratings.
Since 2006, Chester County has issued about $887 million of debt, with the largest issuance occurring in 2009 when it sold $240 million of securities. The deal on Wednesday will make 2016 its highest issuance since 2009. The county issued under $100 million in 2006-2007 and 2010-2015.
On Thursday, the South Carolina Transportation Infrastructure Bank is competitively selling $204.02 million of Series 2016A revenue refunding bonds. The deal is rated A1 by Moody's and A by Fitch.
The S.C. TIB last competitively sold comparable bonds was on June 18, 2015, when Wells Fargo Securities won $157.1 million of Series 2015A revenue refunding bonds with a true interest cost of 2.498%.
Also on Thursday, Wells Fargo is expected to price North Carolina's Wake Forest University's $175 million of Series 2016 educational facilities revenue and revenue refunding bonds.
On the day-to-day calendar, there is a $216.180 million competitive offering from the Florida Board of Education for public education capital outlay refunding bonds. The deal is rated Aa1 by Moody's and triple-A by S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $354.3 million to $6.67 billion on Wednesday. The total is comprised of $4.02 billion of competitive sales and $2.65 billion of negotiated deals.
