The municipal market was mostly mixed Friday ahead of an early close and yesterday's Martin Luther King Day holiday.
"We've really gotten a ton firmer the last week or two, but we're slowing down a bit today," a trader in New York said. "Can't say it's unexpected. [Ten-year] Treasuries are off quite a bit, so there's that pressure, plus it's Friday, it's an abbreviated session ahead of a long weekend. It's been a busy week, and people are mostly ready for the weekend."
Trades reported by the Municipal Securities Rulemaking Board Friday were mixed. A dealer sold to a customer insured Maryland Health and Higher Educational Facilities Authority 5.25s of 2038 at 6.16%, even with where they were traded Thursday. A dealer sold to a customer Illinois 5.1s of 2033 at 5.74%, even with where they were sold Thursday. Bonds from an interdealer trade of University of California 4.75s of 2030 yielded 5.41%, down one basis point from where they traded Thursday. Bonds from an interdealer trade of California 5s of 2038 yielded 5.55%, two basis points lower than where they traded Thursday.
Bonds from an interdealer trade of Broward County, Fla., School Board 5s of 2028 yielded 5.06%, two basis points higher than where they traded Thursday. A dealer sold to a customer New Jersey Educational Facilities Authority 4.5s of 2038 at 4.65%, one basis point higher than where they were sold Thursday. A dealer sold to a customer insured Osceola County, Fla., 5.25s of 2038 at 4.48%, even with where they traded Thursday.
"There's actually even a bit of weakness in the market today," a trader in Los Angeles said. "Can't remember the last time I said that. But it's there, in spots, just like there's some firmness in spots. It's a pretty decidedly mixed day, heading into the long weekend."
The Treasury market showed losses Friday. The yield on the benchmark 10-year Treasury note, which opened at 2.20%, was quoted near the end of the session at 2.32%. The yield on the two-year note was quoted near the end of the session at 0.72% after opening 0.71%. The yield on the 30-year bond, which opened at 2.86%, was quoted near the end of the session at 2.88%.
In economic data released Friday, the consumer price index dropped 0.7% in December after a revised 1.7% decline in November. Economists polled by Thomson Reuters had predicted a 0.9% drop.
The CPI core was unchanged in December after no change in November. Economists polled by Thomson had predicted a 0.1% rise.
Industrial production in the nation was down 2.0% in December while capacity utilization fell to 73.6. The drop in production level followed a 1.3% decrease the previous month, while November capacity use was revised down to 75.2 from 75.4.
Thomson had forecast a 1.0% decrease for production and a 74.6% level for capacity utilization.
The University of Michigan's preliminary January consumer sentiment index reading was 61.9 compared to the final December 60.1 reading. Economists polled by Thomson Reuters had predicted a 59.0 reading for the index.
Activity in the new-issue market was light Friday.