The municipal market was slightly weaker yesterday, following Treasuries. “Things are a little easier, but it seems that if things trade down at all, the bid is there from a number of buyers,” a trader in New York said. “I think we are off about two basis points but there are people looking to trade some bonds here.”Trades reported by the Municipal Securities Rulemaking Board yesterday showed little movement. Bonds from an interdealer trade of insured California 4.5s of 2030 yielded 4.69%, even with where they traded Wednesday. A dealer sold to a customer insured New Jersey Transportation Trust Fund 5s of 2016 at 3.46%, even with where they traded Wednesday. Bonds from an interdealer trade of insured Maine Health & Higher Educational Facilities Authority 5s of 2025 yielded 4.31%, down one basis point from where they traded Wednesday.The Treasury market was slightly weaker yesterday. The yield on the benchmark 10-year Treasury note, which opened at 3.95%, finished at 4.02%. The yield on the two-year note was quoted near the end of the session at 3.03%, after opening at 2.93%.In economic data released yesterday, initial jobless claims for the week ending Dec. 1 came in at 338,000, after 353,000 the previous week. Economists polled by IFR Markets had predicted 335,000 initial claims.In the new-issue market yesterday, Rhode Island sold $220 million of general obligation tax anticipation notes to Merrill Lynch & Co., with a true interest cost of 3.05%. The Tans are slated to mature in June 2008, and feature a yield of 2.95% with a 3.75% coupon. The Tans are rated MIG-1 by Moody’s Investors Service and F-1-plus by Fitch Ratings. Depfa Bank PLC priced $50.8 million of school district revenue bond financing program revenue bonds for the Dormitory Authority of the State of New York. The bonds mature from 2008 through 2024, with term bonds in 2028, 2032, and 2037. Yields range from 3.05% with a 4% coupon in 2008 to 4.46% with a 5% coupon in 2037. The bonds are callable at par in 2017. Financial Security Assurance Inc. insures the bonds, and the underlying credit is rated A3 by Moody’s and A-plus by both Standard & Poor’s and Fitch.Citi priced $36.9 million of tobacco settlement asset-backed bonds for the Guam Economic Development and Commerce Authority in two series. Bonds in the larger series — $33.5 million of current interest bonds — mature in 2032 and 2047. Yields range from 5.45% with a 5.25% coupon in 2032 to 5.90% with a 5.625% coupon in 2047. Fitch rates these bonds BBB-plus. Bonds in the smaller series — $3.4 million of capital appreciation turbo term bonds — mature in 2057. The bonds have a yield to maturity of 7.25%. Fitch rates these bonds BBB-minus.RBC Capital Markets priced $34.5 million of unlimited-tax school building bonds for the Royal Independent School District, Tex., in two series. The bonds mature in 2010 through 2014, and 2018 through 2029, with term bonds in 2033 and 2038. Yields range from 3.24% with a 4% coupon in 2010 to 4.74% with a 4.625% coupon in 2038. The bonds are callable at par in 2017. Bonds maturing in 2015 through 2017 are capital appreciation bonds, with yields to maturity that range from 3.93% in 2015 to 4.08% in 2017. The Permanent School Fund guarantee program insures the bonds, and the underlying credit is rated A-minus. Wachovia Bank NA priced $30 million of installment purchase revenue bonds for South Carolina’s Lee County School Facilities Inc. The bonds mature in 2016 through 2022, with term bonds in 2027 and 2031. Yields range from 4.69% with a 6% coupon in 2016 to 5.35% with a 6% coupon in 2031. The bonds are callable at par in 2017. Radian Asset Assurance insures the bonds.On Tuesday, the Federal Open Market Committee will decide whether to change the federal funds target rate, which currently stands at 4.50%. According to the 30-day federal funds futures contract traded on the Chicago Board of Trade, the market is currently pricing in a 100% probability that the FOMC will decrease the target rate by at least 25 basis points, and a 38% probability that the target rate will be decreased by 50 basis points. The FOMC has cut the target rate twice in the last two meetings — by 50 basis points in their Sept. 18 meeting, and by another 25 basis points in the Oct. 31 meeting. Prior to that, the rate had remained unchanged since June 2006. In other news, Pennsylvania has opted to return to Ipreo’s Parity electronic bidding system for its $700 million competitive GO bond sale next Thursday, after technical problems with Grant Street Group’s MuniAuction halted the commonwealth’s first attempt at the sale Tuesday.Also, New York City announced that it will extend the retail order period on its scheduled $600 million refunding of fixed-rate GO debt selling Wednesday. The deal will now have a three-day retail order period beginning today. The bonds will be priced by Morgan Stanley. Moody’s rates the city Aa3, Standard & Poor’s rates it AA, and Fitch rates it AA-minus.In terms of economic data, the November non-farm payrolls report will be released today. Also, the preliminary December University of Michigan consumer sentiment index will be released. Economists polled by IFR Markets are predicting that 65,000 new jobs were created in November, along with a 76.0 Michigan sentiment reading.

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