Secondary bond market

Municipals are tethered to Treasuries, more so in recent sessions, and have cheapened, but strong technicals — $18.5 billion of net negative supply and large reinvestment needs — still hang overhead.

Triple-A benchmarks saw cuts of one to two basis points across the curve, but still outperformed two days of UST weakness and have outperformed UST losses since the start of the month.

Better-than-expected job gains, a rising UST complex and an increase in supply to test municipals' resolve.

Secondary trading petered off into Thursday afternoon, holding triple-A benchmarks steady as most participants await Friday's nonfarm payrolls.

The firm has brought on Kalotay Analytics' quantitative libraries to calculate certain metrics, including average life dates and cash-flow yields for taxable term bonds.

The short end of the market has little room to fall lower.

With all eyes on Friday’s employment report, since several additional strong months of gains are needed for the Federal Reserve to be comfortable announcing a tapering of its asset purchases, Wednesday’s news could signal trouble.

Effective spread data yielded interesting results about the way corporate and municipal bonds were treated by Fed backstop programs.

Tighter bidding on bonds 10 years and in pushed high-grade benchmark curves to bump yields.

Municipals returned 0.83% in July with a year-to-date return of 1.90%. High-yield returned 1.20% in July and 7.40% year-to-date. Taxables led July with 1.65% returns and 1.95% for the year.