The municipal market was slightly weaker Friday as the week drew to a close.
"We were mostly flat in the morning, but there's a little weakness seeping into the market now," a trader in New York said. "Pretty much in complete reverse of Treasuries. But it's still fairly quiet. I'd say we're down about two, maybe three basis points overall."
Trades reported by the Municipal Securities Rulemaking Board Friday showed losses. A dealer sold to a customer Puerto Rico Public Buildings Authority 6.25s of 2031 at 6.46%, three basis points higher than where they were sold Thursday. Bonds from an interdealer trade of California 5s of 2028 yielded 5.31%, three basis points higher than where they traded Thursday. A dealer sold to a customer Alaska Housing Finance Corp. 4.625s of 2022 at 5.20%, up two basis points from where they traded Thursday. A dealer sold to a customer Union County, N.C., 4.25s of 2028 at 4.38%, one basis point higher than where they were sold Thursday.
A dealer sold to a customer Dormitory Authority of the State of New York 5.7s of 2036 at 4.48%, three basis points higher than where they traded Thursday. A dealer sold to a customer University of Virginia 5s of 2040 at 4.90%, up two basis points higher than where they were sold Thursday. A dealer sold to a customer New York's Triborough Bridge & Tunnel Authority 5s of 2037 at 5.16%, four basis points higher than where they traded Thursday. A dealer sold to a customer insured Washington Health Care Facilities Authority 6s of 2039 at 6.07%, up three basis points from where they were sold Thursday.
"Bonds are a bit cheaper today, but there hasn't been a whole lot going on," a trader in Los Angeles said. "Overall, it's pretty quiet, but there's definitely some weakness out there. Maybe two basis points, three at most."
The Treasury market, however, showed gains Friday. The yield on the benchmark 10-year note, which opened at 2.86%, was quoted near the end of the session at 2.78%.The yield on the two-year note was quoted near the end of the session at 0.95% after opening at 0.99%. The yield on the 30-year bond, which opened at 3.67%, was quoted near the end of the session at 3.57%.
In economic data released Friday, the consumer price index rose 0.3% in January, after a revised 0.8% drop the previous month. Economists polled by Thomson Reuters had predicted a 0.3% increase.
The core CPI climbed 0.2%, after no change the previous month. Economists polled by Thomson had predicted a 0.1% uptick.
Activity in the new-issue market was light Friday. This week, New York City is slated to come to market with the largest deal, a $520 million two-pronged general obligation offering, scheduled to price on Wednesday. Citi is lead manager. The deal includes $400 million of tax-exempt bonds maturing serially from 2011 to 2018 and from 2022 to 2024, as well as $120 million of taxable term bonds maturing in 2021. The bonds are rated Aa3 by Moody's Investors Service, AA by Standard & Poor's, and AA-minus by Fitch Ratings.
A $435.1 million electric and gas system revenue offering from the San Antonio Public Service Board is being planned for pricing by Merrill Lynch & Co. on Wednesday. The bonds are rated Aa1 by Moody's, AA-plus by Standard & Poor's, and AA by Fitch.