The municipal market was slightly firmer Friday.
"We're a little firmer right now," a trader in New York said. "The Treasury market is kind of sideways, but we're doing a little better. I'd say we're a good two basis points firmer right now, more so on the long end."
Trades reported by the Municipal Securities Rulemaking Board Friday showed gains. Bonds from an interdealer trade of California's Bay Area Toll Authority 5s of 2039 yielded 4.39%, down two basis points from where they were sold Thursday. Bonds from an interdealer trade of California 5.25s of 2025 yielded 4.80%, one basis point lower than where they traded Thursday. A dealer sold to a customer New York State Environmental Facilities Corp. 5s of 2030 at 4.75%, down three basis points from where they were sold Thursday.
The Treasury market mostly showed some losses Friday. The yield on the benchmark 10-year Treasury note, which opened at 3.92%, finished at 3.94%. The yield on the two-year note was quoted near the end of the session at 2.50% after opening at 2.43%. The yield on the 30-year Treasury finished at 4.55% after opening at 4.56%.
In economic data released Friday, preliminary second quarter non-farm productivity fell to an annual rate of 2.2%, from 2.6% the previous quarter. Economists polled by IFR Markets had predicted a 2.7% annual rate.
Preliminary second quarter unit labor costs came in at 1.3%, after a revised 2.5% the previous quarter. Economists polled by IFR had predicted unit labor costs would rise 1.3%.
Merchant wholesalers posted a 1.1% increase in inventories in June, while sales jumped 2.8% in the month. Inventories of merchant wholesalers grew to $435.9 billion, following an upwardly revised 0.9% increase to $431.3 billion in May. Meanwhile, sales of merchant wholesalers rose to about $411.2 billion, following May's revised 2.2% increase to $399.8 billion. Economists polled by IFR Markets predicted a 0.6% increase in wholesale inventories, and 0.8% growth in wholesale sales.
This week, on the economic front July import prices, July retail sales, June business inventories, and business sales for June will be released Wednesday. On Thursday, the July consumer price index, initial jobless claims for the week ended Aug. 9, and continuing jobless claims for the week ended Aug. 2 are due, followed Friday by July industrial production, July capacity utilization, and the preliminary August University of Michigan consumer sentiment index.
Economists polled by IFR Markets are predicting a 1.0% rise in import prices, no change in retail sales, a 0.5% uptick in retail sales excluding autos, a 0.5% climb in business inventories, a 1.7% increase in business sales, a 0.4% rise in CPI, a 0.2% climb in CPI core, 440,000 initial jobless claims, 3.300 million continuing jobless claims, no change in industrial production, 79.8% capacity utilization, and a 62.0 Michigan sentiment index.
Activity in the new-issue market was light Friday.