The municipal market was unchanged to slightly weaker Friday. Traders said tax-exempt yields were flat to up about one or two basis points.
"Bonds are cheapening up a little bit yet again, for what seems like the umpteenth day in a row," a trader in New York said. "There are a few bits and pieces selling, though, mostly on the longer end. There are some people saying that we might have finally hit our top and yields might start to drop, but I don't see it happening just yet. It sure would be nice, though."
A trader in Chicago noted that the market was "a lot more interested" Friday than it had been recently.
"[Thursday], we were less worse, and by that afternoon, the market was interested," the trader said. "And now, it's more interested. It's kind of tough to get a read on it, but the market is definitely clearing."
In the new-issue market Friday, JPMorgan priced for retail investors $200 million of New York's Metropolitan Transportation Authority revenue bonds, the second day of a two-day retail offer period that began Thursday. The deal is set to close Oct. 23.
The Series 2008C bonds mature from 2009 through 2013, with term bonds in 2018, 2023, and 2028. Yields range from 3.40% with a 4% coupon in 2010 to 6.50% with a 6.60% coupon in 2028. The bonds, which are callable in 2018, are rated A2 by Moody's Investors Service, and A by Standard & Poor's and Fitch Ratings.
The MTA Tuesday said it planned to postpone the deal, originally slated for $500 million, due to unfavorable market conditions, before bringing it to retail investors Thursday. Since Sept. 18, more than 200 bond and note sales, both competitive and negotiated and totaling more than $11 billion, have been rescheduled for later dates, postponed indefinitely, or canceled outright, according to information compiled by The Bond Buyer from its offerings calendars.
Trades reported by the Municipal Securities Rulemaking Board were flat to slightly weaker. A dealer sold to a customer insured Puerto Rico 6s of 2027 at 7.26%, one basis point higher than where they were sold Thursday. A dealer sold to a customer insured Los Angeles Harbor Department 5s of 2029 at 7.61%, even with where they traded Thursday. A dealer sold to a customer insured Honolulu 5s of 2032 at 6.37%, even with where they traded Thursday. A dealer sold to a customer California 5.5s of 2029 at 6.25%, even with where they were sold Thursday. A dealer sold to a customer insured New York MTA 5.75s of 2032 at 6.18%, up two basis points from where they traded Thursday.
The Treasury market was somewhat mixed Friday. The yield on the benchmark 10-year Treasury note, which opened at 3.96%, finished at 3.93%. The yield on the two-year note, which opened at 1.62%, finished at 1.61%. And the yield on the 30-year Treasury bond, which opened at 4.26%, was quoted near the end of the session at 4.32%.
In economic data released Friday, housing starts came in at 817,000 in September after a revised 872,000 the previous month. Economists polled by Thomson Reuters had predicted 880,000 housing starts.
Building permits came in at 786,000 in September after a revised 857,000 the previous month. Economists polled by Thomson had predicted 850,000 building permits.
The University of Michigan's preliminary October consumer sentiment index reading was 57.5, posting its largest-ever drop from the final September 70.3 reading. Economists polled by Thomson had predicted a 66.0 reading for the index.