As an active week in the primary market wound down, municipals finished largely flat in generally quiet trading conditions Friday.
Traders said tax-exempt yields were better by up to a basis point on the long end, weaker by up to a basis point on the shorter end, and unchanged through the rest of the curve.
"It's flat for the most part, and it's pretty quiet," a trader in New York said. "The unemployment report pretty much matched expectations, so I don't think that really had any impact on our market. Really, the impact the data has on our market these days is somewhat muted as a general rule. But, we're coming to the end of a week where we dealt with a healthy amount of supply, and it looks like people are somewhat on the sidelines here on Friday. I'd just call it flat."
"There's not a lot going on today," a trader in San Francisco said. "We're probably just unchanged, with not much trading going on in the secondary. There was a little movement scattered in a couple parts of the curve, but overall, I'd say it's just unchanged."
The Treasury market showed losses Friday. The yield on the benchmark 10-year note, which opened at 2.81%, was quoted near the end of the session at 2.88%. The yield on the two-year note was quoted near the end of the session at 0.95% after opening at 0.88%. The yield on the 30-year bond, which opened at 3.49%, was quoted near the end of the session at 3.55%.
As of Thursday's close, 10-year tax-exempt bonds were trading at 116.7% of comparable Treasuries, according to Municipal Market Data. Additionally, 30-year munis were trading at 138.5% of comparable Treasuries. Also, as of the close Thursday, 30-year tax-exempt triple-A rated general obligation bonds were trading at 150.5% of the comparable London Interbank Offered Rate.
In economic data released Friday, non-farm payrolls dropped 651,000 in February, after a revised 655,000 decline the prior month. Economists polled by Thomson Reuters had predicted that 648,000 jobs were lost in February.
Also, the unemployment rate came in at 8.1%, after a rate of 7.6% the previous month. Economists polled by Thomson Reuters had predicted an unemployment rate of 7.9%.
This week, a slate of economic data will be released. Tomorrow, January wholesale inventories will be released, followed Thursday by initial jobless claims for the week ended March 7, continuing jobless claims for the week ended Feb. 28, February retail sales, and January business inventories. Friday, February import prices and the preliminary March University of Michigan consumer sentiment index are due.
Economists polled by Thomson Reuters are predicting a 1.0% drop in wholesale inventories, 645,000 initial jobless claims, 5.130 million continuing jobless claims, a 0.5% drop in retail sales, a 0.2% dip in retail sale excluding autos, a 1.0% decrease in business inventories, an 0.8% decline in import prices, and a 55.0 Michigan sentiment index.
Activity in the new-issue market was light Friday.