Top-shelf municipal bonds were slightly stronger on Wednesday around midday, according to traders, as yields on some maturities were as many as three basis points lower.
Secondary Market
The yield on the 10-year benchmark muni general obligation was as many as two basis points lower from 2.45% on Tuesday, while the yield on the 30-year decreased by as many as two basis points from 3.18%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were stronger on Wednesday around midday. The yield on the two-year Treasury was lower at 1.21% from 1.22% on Tuesday, while the 10-year Treasury yield fell to 2.55% from 2.56%, and the yield on the 30-year Treasury bond decreased to 3.14% from 3.15%.
The 10-year muni to Treasury ratio was calculated at 95.6% on Tuesday, compared with 96.7% on Monday, while the 30-year muni to Treasury ratio stood at 101.0%, versus 102.3%, according to MMD.
2016 Issuance by Sector
Education and general purpose bonds were the leading sectors by volume, as the days of issuance in the year dwindle, education has seen $124.82 billion, followed by general purpose with $103.70 billion, according to data from Thomson Reuters.
After the top two, there is a huge drop off as the next highest sector, transportation, has accounted for $49.59 billion and utilities follows with $49.44 billion.
The bottom two sectors accounted for only $12.12 billion, with public facilities accounting for $9.79 billion and environmental facilities $2.33 billion.
Primary Market
There are no scheduled deals larger than $100 million for the rest of this week.
"Issuance is basically finished for the year now," said a New York trader. "Volumes are around 20% lighter than the last two weeks; there is pretty much no primary action, so all of the action is in the secondary."
It comes as no surprise, since at this time of year it is not unusual to see such minuscule activity.
"Right around this time every year, the market goes into a little hibernation," said a Midwest trader. "Things should start rolling again in the New Year."
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 57,437 trades on Tuesday on volume of $15.977 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $347.1 million to $5.30 billion on Wednesday. The total is comprised of $1.10 billion of competitive sales and $4.20 billion of negotiated deals.
