The municipal market languished through a dismal trading session on Friday afternoon that saw little movement — other than traders closing up shop for the early weekend.
Traders said tax-exempt yields were mostly flat throughout the curve, but noted a firm tone in the primary and secondary as the U.S. markets prepared for an early close.
Yields were steady across the curve on Friday, according to Municipal Market Data. The two-year benchmark yield remained at 0.33%, while the 10-year and 30-year also spent the third day consecutive day at 1.83% and 3.14%, respectively.
"It's super-quiet because of the long weekend," said a New York trader. "It's flat throughout the curve … firm, but very quiet."
Much of this week's activity focused on the revised $9.21 billion in primary issuance, according to Thomson Reuters. Some bonds from the $949.6 million New York City general obligation offering, which was freed to trade on Friday morning, were offered in the secondary, but overall the market barely drifted along at a snail's pace, another New York trader said.
"There were a couple of serial maturities offered in 2005, but no bid posted. Overall, it was a flat read in the secondary," he added.
"It's been real quiet," agreed another New York trader. "Most shops are basically half-staffed … it's just a get-away day."
"We are doing some business and spending some June money coming in, but overall, I don't see the market changing much basically because no one is here," the trader continued. "It's hard when nobody's in to get a feel for the direction of the market."
Treasury yields were mixed on the day as the benchmark 10-year yield fell one basis point to 1.74%, and the 30-year yield closed up one basis point at a 2.84% compared with early Friday morning levels.
The two-year Treasury, however, remained unchanged at 0.29% on the day.
Next week's municipal calendar is expected to be on the lighter side as the bond market is closed on Monday and an estimated $4.62 billion of new issuance is scheduled for sale, according to Ipreo LLC and The Bond Buyer.
"There's a fairly positive outlook on next week because supply is lower," the New York trader said.
The competitive market will see an estimated $1.71 billion in post-holiday new issuance, the largest deal of which will be a $600 million Virginia Transportation Board revenue bond issue scheduled for Thursday.
The deal, which is slated to mature from 2013 to 2037, is rated AA-plus by Standard & Poor's and Fitch Ratings.
Muni ratios to Treasuries continued to be relatively attractive on Friday.
The triple-A muni scale in 10 years was at 104% of comparable Treasuries and 30-year munis were at 110.2%, according to MMD.
In addition, 30-year tax-exempt triple-A GOs remained at 121.7% of the comparable London Interbank Offered Rate on Friday afternoon, MMD said.