Top-quality municipal bonds finished steady to a bit stronger on Thursday, traders said, as the secondary market went into defensive mode ahead of Friday's jobs report while the primary wound down for the week.
The Labor Department will release the January employment report. Economists surveyed by IFR Market expect non-farm payrolls to have risen by 171,000 in January, with the unemployment rate remaining at 4.7%.
Secondary Market
The 10-year benchmark muni general obligation yield fell one basis point to 2.33% from 2.34% on Wednesday, while the yield on the 30-year GO was unchanged from 3.09%, according to the final read of Municipal Market.
U.S. Treasuries were mixed on Thursday. The yield on the two-year Treasury dipped to 1.20% from 1.21% on Wednesday, while the 10-year Treasury was unchanged from 2.47%, and the yield on the 30-year Treasury bond increased to 3.08% from 3.07%.
The 10-year muni to Treasury ratio was calculated at 94.3% on Thursday compared to 94.7% on Wednesday, while the 30-year muni to Treasury ratio stood at 100.2%, versus 100.4%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 46,025 trades on Wednesday on volume of $15.65 billion.
Primary Market
The last of the larger deals came to market a day after the Federal Reserve left interest rates unchanged. Wednesday afternoon, the Federal Open Market Committee voted unanimously to keep the fed funds rate target at 0.5% to 0.75%.
In the competitive arena, the Unified Government of Wyandotte County/Kansas City, Kan., sold $103.925 million of securities in four separate competitive issues.
JPMorgan Securities won the $62.44 million Series 2017I municipal temporary notes with a true interest cost of 1.15%.
JPMorgan also won the $14.395 million of Series 2017C GO refunding bonds with a TIC of 2.595%.
Robert W. Baird won the $22.25 million of Series 2017A unlimited tax general obligation improvement bonds with a TIC of 3.24%.
PNC Capital Markets won the $4.84 million of Series 2017B taxable GO improvement bonds with a TIC of 3.52%.
The bonds are rated AA by S&P Global Ratings and the notes are rated SP1-plus by S&P.
Since 2007, the Unified Government of Wyandotte County and Kansas City has issued about $1.76 billion of debt, with the largest issuance occurring in 2010 when it sold roughly $325 million of debt.
It came to market with just $34.7 million in 2013, one of four times it came with less than $100 million during the same period of time.
Raymond James priced the Aldine Independent School District, Texas' $101.01 million of Series 2017 unlimited tax refunding bonds.
The issue was priced to yield from 0.93% with a 5% coupon in 2018 to 3.39% with a 4% coupon in 2033.
The deal, which is backed by the Permanent School Fund guarantee program, is rated triple-A by Moody's Investors Service and S&P.
Tax-Exempt Money Market Fund Inflows
Tax-exempt money market funds experienced outflows of $797 million, bringing total net assets to $130.51 billion in the week ended Jan. 30, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $488.2 million to $131.30 billion in the previous week.
The average, seven-day simple yield for the 233 weekly reporting tax-exempt funds were unchanged from 0.23% in the previous week.
The total net assets of the 863 weekly reporting taxable money funds decreased $4.04 billion to $2.519 trillion in the week ended Jan. 31, after an inflow of $17.03 billion to $2.523 trillion the week before.
The average, seven-day simple yield for the taxable money funds increased to 0.27% from 0.26% the week before.
Overall, the combined total net assets of the 1,099 weekly reporting money funds fell $4.84 billion to $2.650 trillion in the week ended Jan. 31 after inflows of $17.52 billion to $2.654 trillion in the prior week.
