Munis were mixed on Wednesday around midday, according to traders, as yields on the short end of the curve were as many as two basis points higher, while some maturities on the middle and long end were lower by as many as one basis point.
Secondary Market
The 10-year benchmark muni general obligation yield was steady from 2.49% on Tuesday, while the yield on the 30-year GO was unchanged at 3.25%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were mostly stronger on Wednesday around lunchtime. The yield on the two-year Treasury was flat at 1.38% from Tuesday, while the 10-year Treasury yield was down to 2.58% from 2.59%, and the yield on the 30-year Treasury bond decreased to 3.15% from 3.17%.
On Tuesday, the 10-year muni to Treasury ratio was calculated at 96.0%, compared with 95.4% on Monday, while the 30-year muni to Treasury ratio stood at 102.5%, versus 101.8%, according to MMD.
Primary Market
With the Federal Open Market Committee set to complete its meeting on Wednesday and announce a decision on interest rates, municipal market participants are waiting for official announcement, although most believe it will increase the fed funds rate target by 25 basis points.
There are no large deals scheduled for Wednesday, as is typical on days when the FOMC meets.
A rate hike has already been priced in on the short end of the curve and market sources have been talking about all the cash that is just waiting on the sidelines until after the Fed.
"The waiting will be over by 2 p.m. today. I am thinking things will start to ramp up next week," said one New York trader.
On Dec. 14, the FOMC last raised its fed funds target by 25 basis points to between 0.50% and 0.75%, with a unanimous vote.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 33,771 trades on Tuesday on volume of $8.999 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.46 billion to $9.57 billion on Wednesday. The total is comprised of $5.34 billion of competitive sales and $4.23 billion of negotiated deals.
