The municipal market was mostly flat with a slightly weaker tone Friday amid fairly light secondary trading activity and a barren new-issue calendar.
“This whole week has been rather directionless, and it’s more of the same today,” a trader in New York said. “The secondary is pretty quiet. It was quiet Monday and Tuesday, picked up a bit Wednesday, but then regressed in terms of activity yesterday. There have been some bits and pieces trading so far, but we’re flat.”
Municipal Market Data’s triple-A scale yielded 2.39% in 10 years Friday, up two basis points from Thursday, while the 20-year scale remained flat at 3.37%. The scale for 30-year debt also held steady at a yield of 3.75%.
Yields hit a generational low in the late summer with the benchmark triple-A 10-year muni yield bottoming at 2.17% on Aug. 25. They then backed off about 20 basis points in early September, and have all but stalled since then. The 10-year yield’s one basis point increase to 2.37% Thursday was the first movement on the 10-year all week.
Friday’s triple-A muni scale in 10 years was at 93.4% of comparable Treasuries and 30-year munis were at 95.2%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 105.3% of the comparable London Interbank Offered Rate.
“There is some scattered weakness in the belly of the curve, around 10 years out,” a trader in Los Angeles said. “But it’s quiet. On the whole, I’d call it unchanged.”
The Treasury market was mixed Friday. The benchmark 10-year note was quoted near the end of the session at 2.56% after opening at 2.54%. The 30-year bond was quoted near the end of the session at 3.94% after opening at 3.96%. The two-year note was quoted near the end of the session at 0.35% after also opening at 0.35%.
Trades reported by the Municipal Securities Rulemaking Board Friday showed little movement from Thursday. Bonds from an interdealer trade of insured Miami-Dade County 5s of 2033 yielded 4.75%, even with where they were sold Thursday. A dealer sold to a customer Los Angeles 5s of 2029 at 3.80%, up one basis point from where they traded Thursday.
A dealer sold to a customer Denver 5.75s of 2032 at 5.98%, even with where they were sold Thursday. A dealer bought from a customer Texas’ Aldine Independent School District 4s of 2036 at 4.17%, even with where they traded Thursday.
A dealer sold to a customer taxable New Jersey Transportation Trust Fund Authority Build America Bonds 6.104s of 2028 at 6.15%, even with where they traded Thursday. A dealer sold to a customer New York State 5s of 2039 at 3.61%, even with where they were sold Thursday.
Bonds from an interdealer trade of Florida’s Greater Orlando Aviation Authority 5s of 2039 yielded 4.45%, one basis point higher than where they were sold Thursday.
In Thursday’s secondary market, the MSRB reported 40,822 trades of 15,246 issues for volume of $15.09 billion. Most active was taxable New Jersey TTFA BABs 6.104s of 2028, which traded 329 times at a high of 104.125 and a low of 99.540.