The municipal market was unchanged Friday after an early sell-off was negated by a later rally.

Aside from some permeating firmness in one-year paper, the rest of the tax-exempt curve finished the session flat, according to traders.

“It’s pretty quiet,” one said. “The market was selling off, and now we’re rallying, so it’s hard to get a handle on anything. We’ll see what happens [this] week. I think we’ve got a decent calendar, and some new paper might help.”

The Treasury market, however, showed gains Friday. The yield on the benchmark 10-year Treasury note, which opened at 3.72%, finished at 3.55%. The yield on the two-year note was quoted near the end of the session at 2.17%, after opening at 2.31%.

The economic calendar was light Friday. However, this week will see a spike in economic calendar activity, most importantly with Friday’s release of January non-farm payrolls. Also to be released this week, December new home sales will be released today, and durable goods orders for December and the January consumer confidence index will be released tomorrow.

The advanced third-quarter gross domestic product reading will be released Wednesday, while initial jobless claims for the week ending Jan. 26, continuing jobless claims for the week ending Jan. 19, December personal income, December personal consumption, the December core personal consumption expenditures deflator, and the January Chicago purchasing managers index will be released Thursday.

On Friday, in addition to non-farm payrolls, the January Institute for Supply Management business activity composite index will be released, alongside the final January University of Michigan consumer sentiment index.

Economists polled by IFR Markets are predicting that 58,000 new jobs were created in January. They are also predicting 645,000 new home sales, a 1.6% rise in durable goods orders, no change in orders excluding transportation, an 87.5 reading in the consumer confidence index, 1.2% growth in GDP, 318,000 initial jobless claims, 2.675 million continuing jobless claims, a 0.4% uptick in personal income, a 0.1% increase in personal consumption, 2.2% growth in the core PCE deflator, a 52.0 Chicago PMI reading, a 47.0 reading in the ISM index, and a 79.0 Michigan sentiment reading.

Also this week, the Federal Open Market Committee will hold its meeting on interest rates. The FOMC will meet tomorrow and Wednesday to determine whether it wishes to follow up on its 75-basis-point emergency slashing of the federal funds rate target last week, which dropped it to 3.50%.

The new-issue market was light Friday.


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