The municipal market finished unchanged to slightly weaker Friday in light trading, with much of the weakness situated on the long end.
On the short end, however, Morgan Stanley priced $128.5 million of revenue anticipation notes for Detroit. The Rans mature in 2010, yielding 4.00% with a 5% coupon.
The credit is rated SP-1-plus by Standard & Poor's.
Overall, however, a trader in Los Angeles said "there might be a slightly weaker tone, just in sympathy with Treasuries. I'm not sure I'd say it's a basis point or two weaker. I still think we're pretty flat for the most part, but out long in particular, you might find it a bit cheaper."
"It's fairly quiet out there," a trader in New York said. "Not really much activity to speak of. It's a Friday, so you have your normal quietness out there. A lot of people are just on the sidelines right now. We'll see what next week brings. This was a pretty positive week overall, so I think people are just holding onto their stuff for the most part, and waiting for next week."
The Treasury market showed losses Friday. The yield on the benchmark 10-year note, which opened at 2.76%, finished at 2.87%. The yield on the two-year note was quoted near the end of the session at 0.95% after opening at 0.88%. The yield on the 30-year bond, which opened at 3.59%, was quoted near the end of the session at 3.69%.
As of Thursday's close, the triple-A muni scale in 10 years was at 115.3% of comparable Treasuries, according to Municipal Market Data. Additionally, 30-year munis were 133.2% of comparable Treasuries. As of the close Thursday, 30-year tax-exempt AAA-rated general obligation bonds were at 146.3% of the comparable London Interbank Offered Rate.
In economic data released Friday, the non-farm payrolls report indicated that 663,000 jobs were lost in March, after a drop of 651,000 payrolls the previous month. Economists polled by Thomson Reuters had predicted that 650,000 jobs were lost in March.
The unemployment rate rose to 8.5% in March, its highest level since 1983, and up from 8.1% the previous month. Economists polled by Thomson Reuters had predicted an unemployment rate of 8.5%.
The Institute for Supply Management's non-manufacturing business activity composite index was 40.8 in March, down from 41.6 in February. Economists polled by Thomson had expected a 42.0 level.
This week, a $583 million New York City general obligation offering takes center stage in the primary market. The deal contains both taxable and tax-exempt bonds. Morgan Stanley is senior manager on a deal that includes Citi, JPMorgan, and Merrill, Lynch & Co. as co-managers.
The deal will be sold to institutions tomorrow following a retail order period that concludes today. The credit is rated Aa3 by Moody's Investors Service and AA by both Standard & Poor's and Fitch Ratings.
Meanwhile, the Securities Industry and Financial Markets Association announced Friday that it will reduce the number of recommended early market closes each year from 12 to five, effective immediately.
"SIFMA's Board of Directors and membership reassessed the early close policy, recognizing that additional access to the liquidity provided by our members would benefit all market participants," said Randy Snook, executive vice president at SIFMA in a statement. "Since shortened trading days may limit the liquidity window and create possible market risks which could be mitigated with a full functioning fixed income market on days when liquidity could be normal, we have determined eliminating some of the early closes is a better solution."
The new policy maintains early closes on New Year's Eve, the trading days before Good Friday, Memorial Day, and Christmas, and the day after Thanksgiving.