Volume is expected to screech almost to a halt during the July 4th shortened week.

Ipreo estimates volume of $130 million, down from the revised $6.02 billion sold in the past week, according to updated figures from Thomson Reuters. The calendar for the holiday shortened week ahead is composed of $46.5 million of negotiated deals and $83.9 million of competitive sales.

With America’s birthday falling on a Tuesday this year, the market is set to close early on Monday. There will be lots of empty desks on both Monday and Wednesday, making the trading week even shorter. Volume will be the lowest since the week ended Dec. 20, 2016.

There are no deals scheduled larger than $100 million and the largest is a $77 million offering from Denton County, Texas, that is slated to be priced by Citi on Thursday.

“I think this little break it looks like we are getting next week is coming at a good time,” said Dan Heckman, senior fixed income strategist at U.S. Bank Wealth Management. Top-shelf municipal yields have been trending up the past week, concluding in a seven basis points jump at the end of Thursday’s trading session.

“Recently, there has been more volatility in the Treasury market and maybe that will send a little bit of a wakeup call to the muni market,” he said. “I also think the bond market might be sensing that tax reform could be in play this year and it could put some upside pressure on yields due to a stronger economy.”

Secondary market
Top shelf municipal bonds finished unchanged on Friday. The yield on the 10-year benchmark muni general obligation was flat from 1.99% on Thursday, while the 30-year GO yield was steady from 2.79%, according to the final read of Municipal Market Data's triple-A scale.

Treasuries were weaker on Friday. The yield on the two-year Treasury rose to 1.38% from 1.37% on Thursday, the 10-year Treasury yield gained to 2.30% from 2.27% and the yield on the 30-year Treasury bond increased to 2.84% from 2.82%.

On Friday, the 10-year muni to Treasury ratio was calculated at 86.5%, compared with 87.7% on Thursday, while the 30-year muni to Treasury ratio stood at 98.2% versus 99.0%, according to MMD.

Week's actively traded issues
Some of the most actively traded bonds by type in the week ended June 30 were from New Jersey, New York and Missouri issuers, according to Markit.

In the GO bond sector, the Jersey City, N.J., 3.375s of 2040 were traded 22 times. In the revenue bond sector, the New York City Transitional Finance Authority 4s of 2044 were traded 66 times. And in the taxable bond sector, the Missouri Health and Educational Facilities Authority 3.652s of 2057 were traded 90 times.

Week's actively quoted issues
Nevada, Maryland and Illinois names were among the most actively quoted bonds in the week ended June 30, according to Markit.

On the bid side, the North Las Vegas, Nev., taxable 6.572s of 2040 were quoted by 126 unique dealers. On the ask side, the Maryland Health and Higher Educational Facilities Authority revenue 4s of 2047 were quoted by 291 unique dealers. And among two-sided quotes, the Illinois taxable 5.1s of 2033 were quoted by 48 unique dealers.

Lipper: Muni bond funds see inflows
Investors put money back into municipal bond funds in the latest week, according to Lipper data.

The weekly reporters saw $496.355 million of inflows in the week ended June 28, after outflows of $890.590 million in the previous week.

The four-week moving average was positive at $246.434 million, after being in the green at $109.636 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 had inflows of $347.179 million in the latest week after outflows of $1.078 billion in the previous week. Intermediate-term funds had inflows of $48.313 million after inflows of $92.321 million in the prior week.

National funds had inflows of $528.345 million after outflows of $904.896 million in the previous week. High-yield muni funds reported inflows of $224.042 million in the latest reporting week, after inflows of $231.470 million the previous week.

Exchange traded funds saw inflows of $83.810 million, after inflows of $56.529 million in the previous week.

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Aaron Weitzman

Aaron Weitzman

Aaron Weitzman is a markets reporter for The Bond Buyer, focusing on the sell side of the municipal bond market.
Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.