Top-quality municipal bonds were weaker at mid-session, according to traders, ahead of next week's $8.7 billion of new supply.
Next week's calendar is topped by negotiated and competitive sales from the New York City Transitional Finance Authority totaling over $1 billion.
Volume for the upcoming week is estimated by Ipreo at $8.68 billion, up from a revised total of $1.43 billion sold this week, according to Thomson Reuters.
Next week's calendar is made up of $6.41 billion of negotiated deals and $2.27 billion of competitive sales.
Secondary Market
The yield on the 10-year benchmark muni general obligation rose as much as one basis point from 1.31% on Thursday, while the 30-year muni yield increased as much as one basis point from 1.95%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were mixed on Friday after the release of the June employment report. Non-farm payrolls rose 287,000 last month from a downwardly revised gain of 11,000 in May, originally reported as a 38,000 rise. Economists surveyed by IFR Markets had expected payrolls to rise 175,000 in June.
The yield on the two-year Treasury rose to 0.62% from 0.59% on Thursday as the 10-year Treasury yield was unchanged from 1.39% and the yield on the 30-year Treasury bond decreased to 2.13% from 2.15%.
On Thursday, the 10-year muni to Treasury ratio was calculated at 94.2% compared to 93.3% on Wednesday, while the 30-year muni to Treasury ratio stood at 91.1% versus 89.7%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 33,900 trades on Thursday on volume of $10.78 billion.
Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended July 7 were from Washington state and South Carolina, according to
In the GO bond sector, the Washington 5s of 2023 were traded 29 times. In the revenue bond sector, the S.C. Public Service Authority 2.25s of 2051 were traded 59 times. And in the taxable bond sector, the S.C. PSA 2.388s of 2023 were traded 66 times.
Week's Most Actively Quoted Issues
California issues were among the most actively quoted names in the week ended July 7, according to Markit.
On the bid side, the California taxable 7.55s of 2039 were quoted by nine unique dealers. On the ask side, the University of California revenue 5s of 2051 were quoted by 18 unique dealers. And among two-sided quotes, the California taxable 7.6s of 2040 were quoted by 18 dealers.
Week's Primary Market
There was not a lot of volume coming to market during this week.
Next week's slate is top off by an $800 million negotiated tax-exempt bond sale from the New York City TFA scheduled to be priced by Siebert Brandford Shank on Wednesday after a two-day retail order period. Also on Wednesday, the TFA will competitive sell two separate taxable sales totaling $250 million.
This week, the South Carolina Transportation Infrastructure Bank competitively sold $213.6 million of Series 2016A revenue refunding bonds. Wells Fargo Securities won the bonds with a true interest cost of 2.66%. The deal is rated A1 by Moody's Investors Service and A by Fitch Ratings.
Since 2007, S.C. TIB has issued about $1.7 billion of debt, with the largest issuance occurring in 2012 when it sold $691 million of securities. This deal marked the first time since 2009 and 2010 when it issued debt in back-to-back years. The S.C. TIB did not come to market at all in 2008, 2011, 2013 or 2014.
The Florida Board of Education competitively sold $216.18 million of Series 2016D full faith and credit public education capital outlay refunding bonds.
Morgan Stanley won the issue with a TIC of 2.31%. The deal is rated Aa1 by Moody's and triple-A by S&P Global Ratings and Fitch.
In the negotiated sector, Wells Fargo priced the North Carolina Capital Facilities Finance Authority's $159.1 million of Series 2016 educational facilities revenue and revenue refunding bonds for Wake Forest University. The deal is rated Aa3 by Moody's and AA by S&P.
RBC Capital Markets priced Chester County, Pa.'s, $97 million of general obligation bonds. The deal is rated triple-A by Moody's Investors Service, S&P Global Ratings and Fitch Ratings.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $3.82 billion to $11.77 billion on Friday. The total is comprised of $3.94 billion of competitive sales and $7.82 billion of negotiated deals.
Lipper Corrects Data: Muni Bond Funds See Inflows
For the 40th straight week, municipal bond funds reported inflows, according to corrected Lipper data released on Friday. On Thursday, Lipper erroneously reported that weekly reporting funds had experienced an outflow.
The error was made due to a data miscalculation of several American Funds single-state funds that had been consolidated into its national fund.
The weekly reporters saw $737.996 million of inflows in the week ended July 6, after inflows of $716.009 million in the previous week, Lipper said.
The four-week moving average remained positive at $950.126 million after being in the green at $978.741 million in the previous week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds experienced inflows, gaining $374.956 million in the latest week after inflows of $671.567 million in the previous week. Intermediate-term funds had inflows of $147.424 million after inflows of $124.510 million in the prior week.
National funds had inflows of $688.442 million on top of inflows of $614.091 million in the previous week. High-yield muni funds reported inflows of $200.676 million in the latest reporting week, after inflows of $380.466 million the previous week.
Exchange traded funds saw inflows of $197.821 million, after inflows of $66.835 million in the previous week.
