Top rated municipal bonds were stronger at mid-session, traders said, as the market looked ahead to next week's $7.5 billion new issue slate.
Ipreo estimates total volume for next week at $7.49 billion, up from a revised total of $4.61 billion this week, according to updated data from Thomson Reuters.
The new calendar is composed of $6.13 billion of negotiated deals and $1.36 billion of competitive sales.
Secondary Market
Bonds were stronger on Friday after the release of a mixed employment report for January. The Labor Department said that non-farm payrolls rose by 227,000 as the unemployment rate increased to 4.8%. Economists surveyed by IFR Markets had expected non-farm payrolls to have risen by 171,000 in January with the unemployment rate remaining at 4.7%.
The 10-year benchmark muni general obligation yield fell as much as one basis point from 2.33% on Thursday, while the yield on the 30-year GO was as much as one basis point lower from 3.09%, according to a read of Municipal Market
The yield on the two-year Treasury fell to 1.18% from 1.20% on Thursday, while the 10-year Treasury fell to 2.44% from 2.47%, and the yield on the 30-year Treasury bond decreased to 3.07% from 3.08%.
On Thursday, the 10-year muni to Treasury ratio was calculated at 94.3% compared to 94.7% on Wednesday, while the 30-year muni to Treasury ratio stood at 100.2%, versus 100.4%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 46,391 trades on Thursday on volume of $11.47 billion.
Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended Feb. 3 were from Illinois and New York,
In the GO bond sector, the Chicago, Ill., 6s of 2038 were traded 37 times. In the revenue bond sector, the New York City Municipal Water Finance Authority 5s of 2047 were traded 134 times. And in the taxable bond sector, the Westchester County, N.Y., 1.5s of 2017 were traded 31 times.
Week's Most Actively Quoted Issues
Oregon, Maryland and California names were among the most actively quoted bonds in the week ended Feb. 3, according to Markit.
On the bid side, the Portland, Ore., taxable 6.046s of 2020 were quoted by 1,541 unique dealers. On the ask side, the Maryland Health and Higher Educational Facilities Authority revenue 3.75s of 2036 were quoted by 267 unique dealers. And among two-sided quotes, the Los Angele USD, Calif., taxable 5.755s of 2029 were quoted by 24 unique dealers.
Primary Market
Citigroup began the first of a two-day retail order period for New York City's $800 million of Fiscal 2017 Series C and D general obligation bonds ahead of the institutional pricing on Tuesday.
The $781.37 million of Fiscal 2017 Series C bonds were priced to yield from 1.29% with 3% and 5% coupons in a split 2019 maturity to 2.85% with a 5% coupon in 2028; a 2018 maturity was offered as a sealed bid.
The $18.73 million of Fiscal 2017 Series D bonds were priced to yield from 1.29% with a 3% coupon in 2019 to 3.05% with a 3% coupon in 2029; the 2017 and 2018 maturities were offered as sealed bids.
The deal is rated Aa2 by Moody's Investors Service and AA by S&P Global Ratings and Fitch Ratings.
There were a smaller than usual amount of bonds hitting the screens this week.
Wells Fargo Securities priced the Oklahoma Turnpike Authority's $480 million of Series 2017A second senior revenue bonds and Series 2017B refunding second senior revenue bonds. The deal is rated Aa3 by Moody's and AA-minus by S&P and Fitch.
Barclays Capital priced the New York City Municipal Water Finance Authority's $342.1 million of Fiscal 2017 Series DD water and sewer system second general resolution revenue bonds. The bonds are rated Aa1 by Moody's and AA-plus by S&P and Fitch.
Piper Jaffray priced the North Clackamas School District No. 12, Ore.'s $322.64 million of Series 2017A and Series 2017B general obligation bonds. The deal, which is backed by the Oregon school bond guaranty act, is rated Aa1 by Moody's and AA-plus by S&P.
Goldman Sachs priced the District of Columbia Water and Sewer Authority's $300 million of public utility senior lien revenue bonds and revenue green bonds. The deal is rated Aa1 by Moody's and triple-A by S&P.
Citigroup priced the University of Colorado Hospital Authority's $276.09 million of Series 2017C-1 and Series 2017C-2 revenue put bonds. The deal is rated Aa3 by Moody's and AA-minus by S&P and Fitch.
Raymond James priced the Aldine Independent School District, Texas' $101.01 million of Series 2017 unlimited tax refunding bonds. The deal, which is backed by the Permanent School Fund guarantee program, is rated triple-A by Moody's and S&P.
In the competitive arena, the University System of Maryland sold $115 million of Series 2017A tax-exempt auxiliary facility and tuition revenue bonds. JPMorgan Securities won the deal with a true interest cost of 3.15%. The system also competitively sold $52.26 million of Series 2017B tax-exempt auxiliary facility and tuition refunding revenue bonds. Citigroup won the deal with a TIC of 1.57%. Both deals are rated Aa1 by Moody's and AA-plus by S&P and Fitch.
The Unified Government of Wyandotte County/Kansas City, Kan., sold $103.925 million of securities in four separate competitive issues. JPMorgan Securities won the $62.44 million Series 2017I municipal temporary notes with a TIC of 1.15%; JPMorgan also won the $14.395 million of Series 2017C GO refunding bonds with a TIC of 2.595%. Robert W. Baird won the $22.25 million of Series 2017A unlimited tax general obligation improvement bonds with a TIC of 3.24% and PNC Capital Markets won the $4.84 million of Series 2017B taxable GO improvement bonds with a TIC of 3.52%. The bonds are rated AA by S&P and the notes are rated SP1-plus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $3.10 billion to $10.54 billion on Friday. The total is comprised of $1.88 billion of competitive sales and $8.66 billion of negotiated deals.
Lipper: Muni Bond Funds Report Inflows
Municipal bond funds attracted inflows again as investors continued their cautious return to the market, according to Lipper data released late Thursday. The weekly reporters saw $14.047 million of inflows in the week ended Feb. 1, after inflows of $6.980 million in the previous week.
The four-week moving average remained in the green at positive $376.734 million, after being positive at $145.238 million in the previous week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds also had inflows, gaining $17.375 million in the latest week after gaining $239.931 million in the previous week. Intermediate-term funds had outflows of $18.018 million after outflows of $140.103 million in the prior week.
National funds had outflows of $31.490 million after inflows of $630 million in the previous week. High-yield muni funds reported inflows of $187.718 million in the latest reporting week, after inflows of $197.757 million the previous week.
Exchange traded funds saw outflows of $70.187 million, after outflows of $147.402 million in the previous week.
