The municipal market was slightly firmer Friday ahead of a three-day weekend in observance of Memorial Day.
"It's quiet, and people are ready for the long weekend, but there is some firmness out there," a trader in New York said. "We got weaker [Thursday], and now there's a bit of a bounce-back heading into the weekend. I'd say we're firmer about a basis point or two on the whole, just following Treasuries."
Trades reported by the Municipal Securities Rulemaking Board Friday showed gains. A dealer sold to a customer insured Texas 4.5s of 2030 at 4.72%, down two basis points from where they were sold Thursday. Bonds from an interdealer trade of New Jersey Economic Development Authority 5.75s of 2029 yielded 5.84%, two basis points lower than where they were sold Thursday. Bonds from an interdealer trade of insured New York State Thruway Authority 5s of 2026 yielded 4.33%, down one basis point from where they traded Thursday.
The Treasury market showed gains Friday. The yield on the benchmark 10-year Treasury note, which opened at 3.91%, finished at 3.85%. The yield on the two-year note was quoted near the end of the session at 2.45% after opening at 2.52%.
In economic data released Friday, existing home sales decreased 1.0% in April to a seasonally adjusted 4.89-million unit rate. The sales decrease to 4.89 million compared to the 4.850-million unit pace predicted by IFR Markets' poll of economists and followed a revised 1.8% drop to a 4.94-million unit level in March.
A slate of economic data will be released during this holiday-shortened week. Today, the May consumer confidence index and April new home sales will be released, followed tomorrow by the April durable goods report. On tap Thursday are the preliminary first-quarter gross domestic product reading, initial jobless claims for the week ended May 24, and continuing jobless claims for the week ended May 17. On Friday, April personal income, April personal consumption, the April core personal consumption expenditures deflator, the May Chicago purchasing managers index, and the final May University of Michigan consumer sentiment index are slated to be released.
Economists polled by IFR Markets are predicting a 60.0 consumer confidence index, 522,000 new home sales, a 1.1% decline in durable goods orders, a 0.7% dip in durable goods orders excluding transportation, 1.0% growth in GDP, 370,000 initial jobless claims, 3.085 million continuing jobless claims, a 0.2% rise in personal income, a 0.2% increase in personal consumption, a 0.1% uptick in the core PCE deflator, a 48.5 reading for the Chicago PMI, and a 59.5 reading for the Michigan sentiment index.
Activity in the new-issue market was light Friday.