Municipal bonds were stronger in early activity as traders get set for a second wave of new issuance to sweep into the market on Wednesday.
The yield on the 10-year benchmark muni general obligation fell as much as one basis point from 2.18% on Tuesday, while the 30-year GO yield dropped one to three basis points from 3.06%, according to an early read of Municipal Market Data's triple-A scale.
U.S. Treasuries were narrowly mixed on Wednesday. The yield on the two-year Treasury rose to 1.27% from 1.26% on Tuesday, while the 10-year Treasury yield declined to 2.28% from 2.29%, and the yield on the 30-year Treasury bond decreased to 2.95% from 2.98%.
On Tuesday, the 10-year muni to Treasury ratio was calculated at 95.2%, compared with 93.8% on Monday, while the 30-year muni to Treasury ratio stood at 102.8%, versus 101.3%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 45,446 trades on Tuesday on volume of $9.30 billion.
Jefferies is set to price the Regents of the University of California’s $1.13 billion deal for retail investors on Wednesday ahead of the institutional pricing on Thursday.
The issue consists of about $448 million of Series Av bonds, $186 million of Series AW taxables and $500 million of Series AX taxable fixed-rate notes.
The deal is rated Aa2 by Moody’s Investors Service and AA by S&P Global Ratings and Fitch Ratings.
Barclays Capital is expected to price the Massachusetts Water Resources Authority’s $300.48 million of Series 2017B general revenue bonds and Series 2017C general revenue refunding green bonds on Wednesday for retail investors ahead of the institutional pricing on Thursday.
The deal is rated Aa1 by Moody’s and AA-plus by S&P and Fitch.
Morgan Stanley is set to price the Trinity River of Texas’ Regional Wastewater System’s $278.49 million of Series 2017 revenue improvement and refunding bonds on Wednesday.
In the competitive arena, the city of Mesa, Ariz., is selling $171.06 million of bonds in two separate sales on Wednesday.
The deals consist of $123.88 million of Series 2017 utility system revenue bonds and $47.18 million of Series 2017 general obligation bonds.
Both deals are rated Aa2 by Moody’s and AA-minus by S&P.
Since 2007, Mesa has sold roughly $1.93 billion of securities, with the most issuance occurring in 2016 when it sold roughly $310 million. The lowest issuance year took place in 2015, when the city issued $61.5 million.
New Castle County, Del., is competitively selling $107.76 million of Series 2017 GOs on Wednesday.
The deal is rated triple-A by Moody’s, S&P and Fitch.
Bond Buyer visible supply
The Bond Buyer's 30-day visible supply calendar decreased $1.33 billion to $11.84 billion on Wednesday. The total is comprised of $3.72 billion of competitive sales and $8.13 billion of negotiated deals.