The municipal market was unchanged Friday amid light secondary trading activity.
“We’re pretty flat,” a trader in New York said. “I’m not really seeing any movement out there, and it’s fairly quiet. There’s not a whole lot trading. It’s just a pretty quiet Friday, for the most part.”
“We’re mostly unchanged, and mostly quiet,” a trader in Los Angeles said. “There’s maybe a bit of a firmer tone out there, but it’s slight. I’d just call it unchanged for the most part.”
The Treasury market showed gains Friday. The yield on the benchmark 10-year note opened at 3.64% and was quoted near the end of the session at 3.61%. The yield on the two-year note opened at 0.86% and was quoted near the end of the session at 0.84%. The yield on the 30-year bond was quoted near the end of the session at 4.51% after opening at 4.55%.
Friday’s Municipal Market Data triple-A scale yielded 2.99% in 10 years and 3.82% in 20 years, compared to levels of 3.00% and 3.82% on Thursday. The scale yielded 4.23% in 30 years Friday, matching Thursday’s level.
As of Thursday’s close, the triple-A muni scale in 10 years was at 82.0% of comparable Treasuries and 30-year munis were 92.6% of comparable Treasuries, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 95.5% of the comparable London Interbank Offered Rate.
Trades reported by the Municipal Securities Rulemaking Board Friday showed little movement.
A dealer sold to a customer taxable Illinois Build America Bonds 6.63s of 2035 at 6.64%, even with where they were sold Thursday.
A dealer sold to a customer California 6s of 2039 at 5.81%, even with where they were sold Thursday. Bonds from an interdealer trade of Puerto Rico 4.75s of 2023 yielded 5.18%, even with where they were sold Thursday.
In economic data released Friday, gross domestic product increased at a 5.7% annual rate in the advance fourth-quarter report, surpassing economists’ estimates and posting the largest quarterly increase in almost six years. Economists polled by Thomson Reuters expected 4.4% GDP growth for the quarter, according to the median estimate.
Core personal consumption expenditures, excluding food and energy purchases, increased 1.4% following a 1.2% rise in the third quarter. Economists polled by Thomson forecast the core PCE price index to increase 1.3%.
The University of Michigan’s final January consumer sentiment index reading was 74.4, compared to the preliminary January 72.8 reading. Economists polled by Thomson Reuters had predicted a 73.0 reading for the index.
The Chicago Purchasing Managers’ Business Barometer rose to 61.5 in January from 58.7 in December. Economists polled by Thomson predicted a 57.5 reading for the indicator.
Activity in the new-issue market was light Friday.