The municipal market was largely unchanged Friday amid fairly light secondary trading activity as the week neared its end.
“There’s maybe a little bit of firmness out there,” a trader in Los Angeles said. “More so on the short end, if anything. Inside of five years, maybe you can pick up a basis point or two. But overall, we’re just pretty flat, and pretty quiet. There seems to be a decent calendar coming up next week, so I think today people are mostly just hanging out on the sidelines.”
“It’s fairly quiet,” a trader in New York said. “There’s not a lot trading, and there’s just not a lot of movement out there. We’re pretty flat at this juncture.”
The Treasury market showed gains Friday. The benchmark 10-year note was quoted near the end of the session with a yield of 3.67% after opening at 3.73%.
The yield on the two-year was quoted near the end of the session at 0.97% after opening at 1.00%. The yield on the 30-year bond was quoted near the end of the session at 4.54% after opening at 4.59%.
The Municipal Market Data triple-A scale yielded 2.94% in 10 years and 3.78% in 20 years Friday, following Thursday’s levels of 2.94% and 3.79%. The scale yielded 4.05% in 30 years Friday, following 4.06% Thursday.
Thursday’s triple-A muni scale in 10 years was at 78.8% of comparable Treasuries and 30-year munis were at 88.5%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 93.1% of the comparable London Interbank Offered Rate.
In economic data released Friday, gross domestic product increased at a 3.2% annualized rate in the first quarter of 2010, below economists’ estimates, and core personal consumption expenditures grew at the smallest pace in 41 years.
Economists polled by Thomson Reuters expected GDP to increase 3.4%, according to the median estimate.
The Chicago Purchasing Managers’ Business Barometer rose to 63.8 in April from 58.8 in March.
Economists polled by Thomson predicted a 60.0 reading for the indicator.
The University of Michigan’s final April consumer sentiment index reading was 72.2 compared to the final March 73.6, the preliminary March 72.5 reading, and the final February 73.6, according to market sources.
Economists polled by Thomson Reuters had predicted a 70.0 reading for the index.
An employment index used to track overall labor costs rose 1.7% for the 12-month period ending in March, after increasing 0.6% at a seasonally adjusted rate during the first quarter of 2010, according to a report the Bureau of Labor Statistics released Friday.
The 0.6% gain for the first quarter followed an unrevised 0.4% uptick for the previous quarter. For the 12-month period ending in December 2009, the index rose 1.5%.
The first-quarter gain was slightly ahead of a 0.5% uptick predicted economists polled by Thomson Reuters.