The municipal market was slightly weaker Friday, ahead of an early market close and the long President's Day weekend.
"It's fairly quiet, but there's a weaker tone out there," a trader in New York said. "I'd say we're probably down two or three basis points at this point, but activity is pretty light ahead of the long weekend."
Trades reported by the Municipal Securities Rulemaking Board Friday showed losses. A dealer sold to a customer Arizona Department of Transportation 5s of 2026 at 4.32%, one basis point higher than where they were sold Thursday. Bonds from an interdealer trade of Pennsylvania Housing Finance Agency 5.45s of 2029 yielded 5.68%, two basis points higher than where they traded Thursday. A dealer sold to a customer insured Miami-Dade County School Board 5.375s of 2034 at 5.62%, up three basis points from where they traded Thursday. A dealer sold to a customer insured Los Angeles Unified School District 5s of 2030 at 5.19%, four basis points higher than where they were sold Thursday.
"Just a pretty quiet day, I'd say," a trader in San Francisco said. "Bonds cheapened up a little bit, but nothing too crazy. Hadn't really seen any cheapening in a little while, but there wasn't a whole lot of trading, so we'll see what happens Tuesday when we get back out there."
The Treasury market showed losses Friday. The yield on the benchmark 10-year note, which opened at 2.78%, finished at 2.90%. The yield on the two-year note was quoted near the end of the session at 0.97% after opening at 0.91%. The yield on the 30-year bond, which opened at 3.50%, was quoted near the end of the session at 3.68%.
In economic data released Friday, the University of Michigan's preliminary February consumer sentiment index reading was 56.2, compared to the final January 61.2 reading. Economists polled by Thomson Reuters had predicted a 61.0 reading for the index.
This week, a slate of economic data will be released. Tomorrow, January import prices, housing starts, and building permits will be released, along with January industrial production and capacity utilization. Initial jobless claims for the week ended Feb. 14 and continuing jobless claims for the week ended Feb. 7 will be released Thursday, alongside the January producer price index and PPI core, and the composite index of leading economic indicators. The January consumer price index and core CPI will be released Friday.
Economists polled by Thomson Reuters are predicting a 1.4% drop in import prices, 530,000 housing starts, 530,000 building permits, a 1.5% decline in industrial production, 72.5% capacity utilization, 620,000 initial jobless claims, 4.850 million continuing jobless claims, a 0.2% rise in PPI, a 0.1% climb in PPI core, no change to the LEI, a 0.3% uptick in CPI, and a 0.1% increase in core CPI.
Activity in the new-issue market was light Friday.