The municipal market opened with a steady tone and light trading after yesterday's volatility that put a heavy cloud above the market heading the holiday.
"Accounts are a little tentative because of what happened yesterday, but it's still steady even though there's a slight uptick in Treasuries," said a New York trader.
"There are not that many customers buying, but if so, they are trying to buy bonds on cheaper levels from the sell-off from yesterday," he said.
The benchmark triple-A general obligation bond due in 2044 opened steady Friday morning at a 2.94% after a seven-basis point increase following Treasury weakness late Thursday.
The 10-year triple-A muni GO opened at a 2.08% -- up nine basis points from the prior day.
Long Treasuries were largely unchanged, down only one basis point at 2.81% at Friday's open compared to Thursday's close when they soared by nine basis points and prices sank the most in 17 months on speculation borrowing costs will rise next year and oil resumed its selloff, according to Bloomberg.
The 10-year Treasury yield, meanwhile, opened two basis points lower at 2.19%, while the two-year started the day one basis point down at 0.63%.
Stocks were little changed from yesterday when they surged and the Standard & Poor's 500 Index posted its biggest two-day rally in more than three years when it jumped 2.4% by 4 p.m. in New York, capping a two-day gain of 4.5 percent -- the most since November 2011, according to Bloomberg.
Municipal trading was limited and the New York trader said most people were holiday-minded following yesterday.
"It's very, very light," he said. "Clients realized what happened yesterday and they are staying on the sidelines."
He said investors will likely come back after New Year's with a renewed interest in finding paper to fulfill specific inquiries in their portfolios.
"The holiday season has a huge effect on what is going on today," he said.
Next week's calendar doesn't have much in store for investors either - with just $27.6 million of new issuance expected, according to Ipreo LLC and The Bond Buyer, down from this week's $5.05 billion, according to Thomson Reuters.
