The municipal market was slightly firmer Friday. Traders said tax-exempt yields were flat to lower by two or three basis points.
"We're doing a little better again," a trader in New York said. "We've been seemingly getting a bit firmer every day, at least every day this week. Today, we've got Treasuries rallying a little bit, and we're sort of following with that. There's not a ton of activity today, but we're better a good two or three basis points."
"We're improved on the day, but the gains are mostly in the short and intermediate range," a trader in Los Angeles said. "We're not seeing much change out long."
The Treasury market showed gains Friday. The yield on the benchmark 10-year Treasury note, which opened at 3.85%, finished at 3.73%. The yield on the two-year note was quoted near the end of the session at 1.21% after opening at 1.23%. The yield on the 30-year bond, which opened at 4.36%, was quoted near the end of the session at 4.22%.
In economic data released Friday, retail sales dropped 2.8% in October after a revised 1.3% decline the previous month. Economists polled by Thomson Reuters had predicted a 2.0% decline.
Excluding autos, retail sales dipped 2.2% in October after a revised 0.5% drop in September. Economists polled by Thomson had predicted a 1.2% drop.
Import prices fell 4.7% in October, after a revised 3.3% decline the previous month. Economists polled by Thomson had predicted a 4.2% drop.
The University of Michigan's preliminary November consumer sentiment index reading was 57.9, compared to the final October 57.6 reading. Economists polled by Thomson Reuters had predicted a 56.0 reading for the index.
Business inventories were down 0.2% and sales levels fell 2.0% in September. Business inventories slid to $1.507 billion following a downwardly revised 0.2% increase in August to $1.511 billion. Thomson had projected that business inventories would be unchanged in the month.
Meanwhile, the 2.0% decrease in overall business sales brought the category to $1.164 billion. The September figure followed a revised 2.2% decrease in August, originally reported as a 1.8% drop.
This week, a larger slate of economic data will be released, starting today with October industrial production and capacity utilization. Tomorrow, the October producer price index will be released, followed by October consumer price index, housing starts, and building permits Wednesday. On Thursday, initial jobless claims for the week ended Nov. 15 will be released, along with continuing jobless claims for the week ended Nov. 8, and the October index of leading economic indicators.
Economists polled by Thomson Reuters are predicting a 0.5% dip in industrial production, 76.1% capacity utilization, a 1.0% decline in PPI, a 0.2% rise in PPI core, a 0.4% drop in CPI, a 0.2% uptick in core CPI, 800,000 housing starts, and 783,000 building permits. They are not yet projecting next week's initial jobless claims and continuing jobless claims.
Activity in the new-issue market was light Friday.