The municipal market was unchanged to slightly firmer yesterday. Traders said tax-exempt yields were flat to lower by one or two basis points.
"It's a bit more active than it was yesterday, but we're still seeing that same sort of firmness," a trader in New York said. "The Treasury market is actually off a bit today , but there is still solid demand for munis, which is keeping yields down."
The Treasury market showed losses yesterday. The yield on the benchmark 10-year Treasury note, which opened at 3.74%, finished at 3.86%. The yield on the two-year note was quoted near the end of the session at 1.22% after opening at 1.16%. The yield on the 30-year bond, which opened at 4.17%, was quoted near the end of the session at 4.34%.
In the new-issue market, Morgan Stanley priced $769 million of state personal income tax revenue bonds for the Dormitory Authority of the State of New York. Bonds from the $656.5 million Series B mature from 2010 through 2026, with term bonds in 2028, 2036, and 2038. Yields range from 2.25% with a 3% coupon in 2010 to 5.53% with a 5.25% coupon in 2038. The bonds are callable at par in 2019.
Bonds from the $61.2 million Series C refunding mature in 2028 and 2032, yielding 5.16% with a 5% coupon and 5.43% with a 5.25% coupon, respectively. The bonds are callable at par in 2019. Bonds from a $51.3 million taxable series mature from 2009 through 2011 and in 2014. The credit is rated AAA by Standard & Poor's and AA-minus by Fitch Ratings.
JPMorgan priced $122 million of bonds for the Louisa, Va., Industrial Development Authority in two series. Bonds from a $60 million series of pollution control refunding revenue bonds mature in 2035, yielding 5.375% priced at par. Bonds from a $62 million series of pollution control refunding revenue bonds mature in 2035, yielding 5.37% priced at par. The credit is rated Baa1 by Moody's Investors Service and A-minus by Standard & Poor's and Fitch.
The Carroll County, Md., commissioners competitively sold $80 million of general obligation consolidated public improvement bonds to Citi with a true interest cost of 4.37%. The bonds mature from 2011 through 2028, with yields ranging from 4.37% with a 4.25% coupon in 2020 to 4.84% with a 4.75% coupon in 2027. Bonds maturing from 2011 through 2019, in 2024, and in 2028 were not formally re-offered. The bonds, which are callable at par in 2018, are rated Aa2 by Moody's and AA-plus by Standard & Poor's and Fitch.
In economic data released yesterday, initial jobless claims for the week ended Nov. 8 came in at 516,000 after a revised 484,000 the previous week. Economists polled by Thomson Reuters had predicted 484,000 initial jobless claims.
Continuing jobless claims for the week ended Nov. 1 came in at 3.897 million after a revised 3.832 million the previous week. Economists polled by Thomson had predicted 3.850 million continuing jobless claims.
Today, October import prices and October retail sales will be released, along with the preliminary November University of Michigan consumer sentiment index, and September business inventories and sales. Economists polled by Thomson are predicting a 4.2% drop in import prices, a 1.9% dip in retail sales, a 1.0% decline in retail sales excluding autos, a 56.0 University of Michigan sentiment index, and no change in business inventories.
Next week, a larger slate of economic data will be released, starting Monday, with October industrial production and capacity utilization. On Tuesday, the October producer price index will be released, followed by October consumer price index, housing starts, and building permits on Wednesday. On Thursday, initial jobless claims for the week ended Nov. 15 will be released, along with continuing jobless claims for the week ended Nov. 8, and the October index of leading economic indicators.
Economists polled by Thomson are predicting a 0.5% dip in industrial production, 76.1% capacity utilization, a 1.0% decline in PPI, a 0.2% rise in PPI core, a 0.4% drop in CPI, a 0.2% uptick in core CPI, 800,000 housing starts, and 783,000 building permits. They are not yet projecting next week's initial jobless claims and continuing jobless claims.
