Summer doldrums continued on Wednesday, with the market reporting flat to slightly improved yields.
Yields on bond maturing between 2015 and 2031 were largely unchanged, with durations between 2024 to 2026 either unchanged or experiencing a one basis point bump, according to Municipal Market Data's 5% triple-A scale. Yields on bonds maturing between 2032 to 2037 saw bumps up to two basis point, while 2038 to 2044 tightened up to just one basis point.
"The broader perspective is that there just hasn't been enough movement in the Treasury market to give us any directionality," explained a New York based trader. "Summer doldrums, people on vacation, not enough new issuance, there's a lot of reasons why you're seeing a sluggish market today, even this week."
Since Tuesday close, the Treasury markets have strengthened slightly. The two-year note fell three basis points to .428%, the 10-year dropped three basis points to 2.427% and the 30-year fell two basis points to 3.255%.
Outside of the expected institutional pricing of New York City's $900 million general obligation deal, the primary market has been light, forcing traders to look for deals in the secondary. A trader confirmed there has been no institutional pricing wire yet.
"I'm looking at nontraditional bonds today, trying to fulfill specific client requests," said the New York trader. "There's not enough in the primary to really satisfy much interest from a buyer's perspective."
The competitive market expected no deals over $100 million, while the negotiated market was dominated by New York City.
In the secondary, the Dallas-Fort Worth Airport revenue bonds was one of the most actively trading credits, with yields on its 5s in 2026 rising to 2.4% in round lots trades from 2.35% on Tuesday, according to Municipal Securities Rulemaking Board's disclosure website EMMA.
Puerto Rico's sales tax financing bonds were also heavy traders, with yields on the 5.25s of 2040 falling to 6.824% in round lot trading from 6.955% on Aug. 5, according to EMMA.
