Municipal bond traders were shaking off the post-holiday doldrums and putting the week on their books as they prepare to take on next week's heft new issue slate.
Treasuries were little changed as stocks moved higher after the release of a stronger-than-expected jobs report.
Non-farm payrolls rose 292,000 in December, after rising an upwardly revised 252,000 in November. Economists surveyed by Bloomberg had expected a 200,000 gain in payrolls last month. The December unemployment rate remained at 5.0%.
In early Friday trading, the yield on the two-year Treasury was flat from 0.96% on Thursday, while the 10-year Treasury yield was unchanged from 2.16% and the 30-year Treasury bond yield increased to 2.95% from 2.93%.
The Dow Jones Industrial Average rose about 125 points, the Nasdaq Composite Index gained around 50 and the S&P 500 Index was up by almost 20.
On Thursday, municipal bonds finished stronger. The yield on the 10-year benchmark muni general obligation fell two basis points to 1.75% from 1.77% on Wednesday, while the 30-year muni yield dropped one basis point to 2.69% from 2.70%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Thursday at 81.3% compared with 81.4% on Wednesday, while the 30-year muni to Treasury ratio stood at 91.9% versus 91.9%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,793 trades on Thursday on volume of $9.72 billion.
The Week's Primary Market
Bank of America Merrill Lynch priced the South Carolina Public Service Authority's $527.54 million of Series 2016A tax-exempt revenue obligation refunding bonds. The bonds were rated A1 by Moody's Investors Service, A-minus by Standard & Poor's and A-plus Fitch Ratings.
BAML also priced the Board of Regents of the University of Texas system's $250 million of Series 2016A taxable revenue financing system bonds and $206.04 million of Series 2016B revenue financing system green bonds. The bonds were rated triple-A by Moody's, S&P and Fitch.
JPMorgan Securities priced the KU Central Development Corp.'s $333.18 million of Series 2016 lease revenue bonds for the Central District Development Project, which are being issued through the Wisconsin Public Finance Authority. The issue was rated Aa2 by Moody's.
Wells Fargo Securities priced the New Jersey Healthcare Facilities Authority's $190.07 million of Series 2016A bonds for the Princeton Healthcare System. The issue was rated Baa2 by Moody's and triple-B by Fitch.
In the competitive arena, the Massachusetts School Building Authority sold $150 million of Series 2016A senior dedicated sales tax bonds. Wells Fargo Securities won the bonds with a true interest cost of 3.46%. The bonds were rated Aa2 by Moody's and AA-plus by Standard & Poor's and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $2.65 billion to $13.14 billion on Friday. The total is comprised of $4.78 billion competitive sales and $8.36 billion of negotiated deals.
Municipal Bond Funds See Inflows
Municipal bond funds saw inflows for the 14th straight week, according to Lipper data released on Thursday.
Weekly reporting funds saw $992.749 million of inflows in the week ended Jan. 6, after inflows of $1.299 billion in the previous week, Lipper said.
The four-week moving average remained positive at $851.299 million after being in the green at $788.604 million in the previous week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds also experienced inflows, gaining $496.862 million in the latest week, on top of inflows of $701.681 million in the previous week. Intermediate-term funds had inflows of $316.115 million after inflows of $421.495 million in the prior week.
National funds saw inflows of $924.675 million after inflows of $1.157 billion in the prior week. High-yield muni funds reported inflows of $307.597 million in the latest reporting week, after an inflow of $300.160 million the previous week.
Exchange traded funds saw inflows of $257.265 million, after inflows of $211.200 million in the previous week.
In the week ended Dec. 30, long-term, long-term municipal bond funds saw inflows, according to the Investment Company Institute. Muni funds saw $2.243 billion of inflows after $1,262 billion of inflows in the previous week, ICI reported.
