The municipal market was largely unchanged Friday, with patches of firmness on the long end of the curve."It's fairly quiet," a trader in New York said. "There are some bits and pieces trading, but people are mostly just ready for the weekend. We're seeing a bit more activity on the long end, you might even pick up a basis point or two out there, but overall, it's pretty flat and mostly quiet."
"I think the market definitely feels firmer," a trader in Los Angeles said. "Now, whether there is enough activity out there to actually move the scale is another story. But there is definitely a firmer tone, and you could even say it's better two, maybe three basis points. But there's not a whole lot going on, so you could call it mostly flat too."
The Treasury market was mixed Friday. The yield on the benchmark 10-year note, which opened at 3.45%, was quoted near the end of the session at 3.46%. The yield on the two-year note was quoted near the end of the session at 1.02% after opening at 1.04%. The yield on the 30-year bond, which opened at 4.22%, was quoted near the end of the session at the same level.
As of Thursday's close, the triple-A muni scale in 10 years was at 85.5% comparable Treasuries, according to Municipal Market Data, while, 30-year munis were 105.9% of comparable Treasuries. As of the close Thursday, 30-year tax-exempt triple-A general obligation bonds were at 108.8% of the comparable London Interbank Offered Rate.
Trades reported by the Municipal Securities Rulemaking Board Friday showed gains. Bonds from an interdealer trade of New York 5s of 2036 yielded 4.74%, down three basis points from where they traded Thursday. A dealer sold to a customer New Jersey Economic Development Authority 5.25s of 2024 at 4.45%, down one basis point from where they were sold Thursday.
A dealer sold to a customer New York's Liberty Development Corp. 5.25s of 2035 at 5.69%, one basis point lower than where they traded Thursday. A dealer sold to a customer Dallas County Hospital District taxable Build America Bonds, 5.62s of 2033 at 5.62%, down two basis points from where they were sold Thursday. A dealer sold to a customer Wisconsin taxable BABs 5.5s of 2029 at 5.53%, two basis points lower than where they were traded Thursday.
In economic data released Friday, personal income was unchanged in July, after a revised 1.1% drop in June. Economists polled by Thomson Reuters had predicted a 0.2% rise.
Personal consumption rose 0.2% in July, after a revised 0.6% gain the previous month. Economists polled by Thomson Reuters had predicted a 0.2% uptick.
The core personal expenditures deflator climbed 0.1% in July after a 0.2% rise in June. Economists polled by Thomson had predicted a 0.1% gain.
The University of Michigan's preliminary August consumer sentiment index reading was 65.7, compared to the preliminary August reading of 63.2. Economists polled by Thomson Reuters had predicted a 64.5 reading for the index.