The municipal market was unchanged to slightly weaker Thursday amid fairly light trading activity in the secondary.
“We’re a little bit weaker,” a trader in New York said. “It’s more in the shorter end of the curve, inside of 10 years, and it’s only about a basis point or two. The long end is pretty well unchanged. So overall, I guess I’d call it flat to slightly weaker. But there isn’t a whole lot trading out there right now. It’s fairly quiet.”
“There’s a little bit of cheapness in spots, but we’re mostly flat,” a trader in Los Angeles said. “We’re down a basis point or two here and there, but on the whole, we’re just pretty flat.”
The Treasury market showed losses Thursday. The benchmark 10-year note was quoted near the end of the session with a yield of 3.87% after opening at 3.82%.
The yield on the two-year was quoted near the end of the session at 1.07% after opening at 1.01%. The yield on the 30-year bond was quoted near the end of the session at 4.75% after opening at 4.74%.
The Municipal Market Data triple-A scale yielded 3.10% in 10 years and 3.84% in 20 years Thursday, almost matching Wednesday’s levels of 3.09% and 3.84%. The scale yielded 4.17% in 30 years Thursday, matching Wednesday.
Thursday’s triple-A muni scale in 10 years was at 80.7% of comparable Treasuries and 30-year munis were at 88.3%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 93.3% of the comparable London Interbank Offered Rate.
In the new-issue market, Illinois competitively sold $250 million of GOs to JPMorgan, with a true interest cost of 1.02%.
The bonds mature in March 2011, with a 2.5% coupon. They were not formally re-offered.
The credit is rated SP-1 by Standard & Poor’s and F1 by Fitch Ratings.
Trades reported by the Municipal Securities Rulemaking Board were flat to slightly weaker. Bonds from an interdealer trade of California 5s of 2037 yielded 5.14%, even with where they were sold Wednesday.
Bonds from an interdealer trade of Connecticut 5.85s of 2032 yielded 5.52%, even with where they were sold Wednesday.
Bonds from an interdealer trade of New Jersey Turnpike Authority 7.41s of 2040 yielded 6.42%, even with where they traded Wednesday. A dealer sold to a customer taxable Bay Area Toll Authority Build America Bonds 6.26s of 2049 yielded 6.31%, even with where they were sold Wednesday.
A dealer sold to a customer Miami-Dade County 5s of 2038 at 5.87%, even with where they traded Wednesday. A dealer sold to a customer Tampa, Fla., 5s of 2026 at 3.57%, one basis point higher than where they were sold Wednesday.
In economic data released today, initial jobless claims fell to a seasonally adjusted 439,000 for the week ending March 27, matching the lowest level of this year.
Continuing claims decreased to 4.662 million for the week ending March 20, the sixth consecutive week without an increase.
Continuing claims are at their lowest level since December 2008.
Economists expected 440,000 initial claims and 4.600 million continuing claims, according to the median estimate from Thomson Reuters.
Construction spending fell 1.3% in February to a seasonally adjusted annual rate of $846.2 billion, the fourth consecutive monthly decline.
Private construction fell 1.2%, the fourth consecutive drop, and private residential construction fell 2.1%, the largest drop in two months.
Economists expected construction spending to fall 1.0%, according to the median estimate from Thomson.
According to the Institute for Supply Management’s monthly report on business, the ISM index jumped to 59.6 in March from 56.5 in February.
Economists polled by Thomson Reuters predicted the index would rise to 56.8.