Prices of top-shelf municipal bonds were steady to stronger at mid-session, according to traders, with yields on most maturities unchanged to one basis point weaker.
In the primary, muni traders looked ahead to a skimpy new issue calendar totaling only about $3.3 billion.
Secondary Market
The yield on the 10-year benchmark muni general obligation was as much as one basis point weaker from 2.16% on Thursday, while the yield on the 30-year GO was steady at 3.11%, according to the final read of Municipal Market Data's triple-A scale.
Treasury prices were mixed on Friday, with the yield on the two-year Treasury note rising to 0.71% from 0.68% on Thursday, while the 10-year yield fell to 2.16% from 2.17% and the 30-year yield decreased to 2.90% from 2.91%.
The 10-year muni to Treasury ratio was calculated on Thursday at 99.7% versus 99.2% on Wednesday, while the 30-year muni to Treasury ratio stood at 107.2% compared to 106.2%, according to MMD.
Primary Market
Total potential volume for next week was estimated by Ipreo at $3.27 billion, consisting of $2.38 billion of negotiated deals and $876 million of competitive sales.
Topping the new issue slate is a $1 billion offering from the Dormitory Authority of the State of New York.
Scheduled to be priced by JPMorgan Securities on Wednesday after a one-day retail order period, the DASNY issue is expected to be rated Aa1 by Moody's Investors Service and triple-A by Standard & Poor's.
The Series 2015E general purpose state personal income tax revenue bonds are tentatively structured as serials running from 2016 through 2037.
City Securities is slated to price Valparaiso, Ind.'s $143 million multi-school building construction first mortgage bonds. The issue is expected to be rated AA-plus by S&P.
Barclays Capital is set to price the Lower Colorado River Authority, Texas, $135 million of Series 2015D refunding revenue bonds on Wednesday. The issue is rated A by S&P and Fitch Ratings.
In the competitive arena, the state of Wisconsin will sell $391 million of Series 2015C general obligation bonds on Tuesday.
Municipal Bond Funds See Outflows
Municipal bond funds saw outflows in the latest week, according to Lipper data released on Thursday.
Funds which report weekly saw $344.563 million of outflows in the week ended Aug. 26, after seeing inflows of $43.656 million in the previous week, Lipper reported.
The latest inflow brings to 17 out of 35 weeks this year that the funds have seen a cash infusion. Inflows for the year to date are still in the green, totaling $2.663 billion.
The four-week moving average remained negative at $149.516 million after being in the red at $81.719 million in the previous week. The moving average has now been negative for 14 weeks in a row. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds also experienced outflows, losing $29.224 million in the latest week, after seeing inflows of $289.019 million in the previous week. Intermediate-term funds saw outflows of $44.327 million after seeing outflows of $6.790 million in the prior week.
Exchange traded funds saw inflows of $61.284 million, after experiencing outflows of $19.800 million in the previous week.
And high-yield muni funds saw outflows of $40.317 million in the latest reporting week, after seeing an inflow of $182.789 million the previous week.
In the past 18 weeks, high-yield funds have seen outflows 12 times totaling $1.815 billion and inflows six times totaling $322.011 million.
The Week's Most Actively Quoted Issues
Puerto Rico and the District of Columbia were some of the most actively quoted names in the week ended Aug. 28, according to data released by Markit.
On the bid side, the Puerto Rico commonwealth GO 8s of 2035 were quoted by 13 unique dealers. On the ask side, the District of Columbia hospital revenue 4s of 2040 were quoted by 21 dealers. And among two-sided quotes, the Puerto Rico commonwealth GO 8s of 2035 were quoted by eight dealers, Markit said.
The Week's Most Actively Traded Issues
Some of the most actively traded issues in the week ended Aug. 28 were in New Jersey, California and Georgia, according to Markit.
In the revenue bond sector, the New Jersey Economic Development Authority 4s of 2024 were traded 133 times. In the GO bond sector, the California 5s of 2045 were traded 76 times. And in the taxable bond sector, the Cobb-Marietta Coliseum and Exhibit Hall Authority, Ga. 4 1/2s of 2047 were traded 32 times, Markit said.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 40,412 trades on Thursday on volume of $9.984 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $710.7 million to $6.78 billion on Friday. The total is comprised of $2.70 billion competitive sales and $4.08 billion of negotiated deals.
