The municipal market was slightly firmer in light trading Tuesday, as participants show little activity during the final full trading session of the week ahead of the Christmas holiday.
"There's not a whole lot going on, but there is some firmness out there," a trader in New York said. "There aren't too many people around, and not a lot of people pressing to get trades done, but stuff that is getting done is firmer. We're probably up two or three basis points overall at this point."
Trades reported by the Municipal Securities Rulemaking Board Tuesday showed some gains. Bonds from an interdealer trade of Port Authority of New York and New Jersey 5s of 2024 yielded 5.15%, even with where they traded Monday. A dealer sold to a customer insured Massachusetts School Building Authority 4.5s of 2035 at 5.93%, down three basis points from where they were sold Monday. A dealer sold to a customer Puerto Rico 5.5s of 2029 at 6.65%, one basis point lower than where they traded Monday.
"We were a bit better, but there wasn't a whole lot of activity, and people were seeming like they were just ready for the holidays," a trader in Los Angeles said. "If you did get anything done though, things were somewhat cheaper, maybe two or three basis points, maybe a little more in spots, but I don't think there was really enough going on to move the scale more than that. All in all, it was just a mostly quiet day, and I think we're going to be in for a number of them as the holiday season progresses on. We'll see what happens after the new year, when things get back to normal."
The Treasury market showed some mild losses Tuesday. The yield on the benchmark 10-year Treasury note, which opened at 2.17%, was quoted near the end of the session at the same level. The yield on the two-year note was quoted near the end of the session at 0.91% after opening at 0.90%. The yield on the 30-year bond, which opened at 2.62%, was quoted near the end of the session at 2.64%.
In economic data released Tuesday, final third-quarter gross domestic product dipped 0.5%, the same as in the previous estimate. Economists polled by Thomson Reuters had predicted a 0.5% drop.
The University of Michigan's final December consumer sentiment index reading was 60.1 compared to the preliminary December 59.1 reading. Economists polled by Thomson Reuters had predicted a 58.6 reading for the index.
Sales of new single-family homes slipped, falling 2.9% to a 407,000 seasonally adjusted annual rate in November. The November figure came after a downwardly revised 419,000 rate in October, a 5.2% drop, Thomson' poll of economists had predicted a 420,000 sales level for November.
Existing home sales decreased 8.6% in November to a seasonally adjusted 4.49 million-unit rate. The sales drop to 4.49 million, compared to the 4.90 million unit pace predicted by Thomson Reuters' poll of economists and followed a revised 4.5% drop to a 4.91 million unit level in October.
This week, a lighter slate of economic data will be released, beginning today, when initial jobless claims for the week ended Dec. 27 and continuing jobless claims for the week ended Dec. 20 will be released. Tomorrow, the December Chicago purchasing managers' business barometer and consumer confidence will be released, followed Friday by the December Institute for Supply Management business activity composite index.