The municipal market was unchanged to slightly weaker Friday.
"We're a little bit weaker, but not much," a trader in Los Angeles said. "Treasuries were off in the second half of the day a bit, and we followed along. I'd say we finished up down a basis point, maybe two."
"It's quiet," a trader in New York added. "I think most municipal participants are holding their breath because of the financials. Everyone's just kind of sitting on their hands. There continues to be value relative to munis, and there are some trades along the curve, but people are hesitant to do anything ahead of the weekend."
The Treasury market showed losses Friday. The yield on the benchmark 10-year Treasury note, which opened at 3.65%, finished at 3.73%. The yield on the two-year note was quoted near the end of the session at 2.23% after opening at 2.22%. The yield on the 30-year Treasury finished at 4.32% after opening at 4.22%.
In economic data released Friday, retail sales dipped 0.3% in August after a revised 0.5% drop the previous month. Economists polled by IFR Markets had predicted a 0.3% increase.
Excluding autos, retail sales dropped 0.7% in August, after a revised 0.3% uptick the prior month. Economists polled by IFR had predicted a 0.2% decline.
The producer price index fell 0.9% in August, after a 1.2% rise the previous month. IFR had predicted a 0.5% decrease.
The PPI core rose 0.2% in August, after a 0.7% gain the previous month. Economists polled by IFR had predicted a 0.2% uptick.
The University of Michigan's preliminary September consumer sentiment index reading was 73.1, compared to the final August 63.0 reading. IFR Markets had predicted a 64.0 reading for the index.
Business inventories rose 1.1% to $1.507 billion in July, following an upwardly revised 0.8% increase in June to $1.491 billion. IFR had projected that business inventories would be up 0.5% in the month.
Meanwhile, a 0.5% increase in overall business sales brought the category to $1.219 billion. The July figure followed an unrevised 1.7% increase in June, and fell short of IFR's projected 1.4% increase.
Activity in the new-issue market was light Friday.