Municipal bond prices barely moved yesterday in dull post-holiday trading as new issuance dried up, forcing market players to wait for Friday's unemployment data for direction.
Treasury prices opened 1/4 point higher on London gains, giving municipals a firm tone. But unfavorable economic data pushed taxables off the highs during midsession.
New construction spending in July advanced 1.6 to a seasonally adjusted annual rate of $404.9 billion on solid gains in both private and public building. Meanwhile, the National Association of Purchasing Management index increased to 54.8% in August from 51.8% in July.
A reading below 50% indicates that the manufacturing economy is generally declining while a reading above 50% reflects expansion.
The long bond eventually shrugged off the news and managed to post slight gains by the close, but municipals barely stirred and traders reported most prices unchanged.
In the debt futures market, the December municipal futures contract closed up 3/32 to 92.26, while the MOB spread widened to negative 144.
The markets are expected to loll through trading sessions this week until Friday, when important unemployment information is released.
New issuance is extremely light, and the most recent 30-day visible supply data compiled early yesterday totals a paltry $1.52 billion, while the Blue List stands at $1.4 billion, down $28 million from last Friday.
In follow-through business, Goldman Sachs & Co., senior manager for $602 million California various purpose taxable bonds, recently reported an unsold balance of $244 million.
Goldman, also senior manager for $105 million California Health Facilities Authority secured revenue bonds for the Hospital of the Good Samaritan, reported an unsold balance of $1.6 million.
Secondary trading was extremely light, but traders said that activity should pick up as investors find it harder to buy bonds in the primary sector.
Traders cited about six trades during the entire session and there was some activity around a bid-list of California totaling $30 million.
In secondary dollar bond trading, New Jersey Turnpike Authority 6.90s of 2014 were quoted unchanged on the day to 99 1/2-1/2 to yield 6.94%. The more seasoned Turnpike 7.20s of 2018 were unchanged at 102 7/8-103 to yield 6.67% to the 1999 par call.
In other dollar bond activity, Florida State Board of Education 7 1/4 of 2023 were unchanged at 103 1/2-3/4 to yield 6.80% to the 2004 par call. New York LGAC 7s of 2016 were down 1/8 point to 98 1/2-5/8 to yield 7.10%. Puerto Rico Electric Power Authority 7s of 2021 were unchanged at 99 1/8-3/8, where they returned 7.13%. And Colorado River Authority insured 6 5/8s of 2021 were down 1/8 to 97-3/8 to yield 6.83%.
In the short-term sector, short-term note yields were mostly unchanged in dull trading.
In secondary activity, March California notes were quoted near the end of cash trading at 4.50% bid, 4.45% offered, while June California notes were quoted at 4.54% bid, 4.50% offered. March New York State Trans were quoted at 5.14% bid, 5.10% offered. New Jersey notes were quoted at 4.53% bid, 4.52% offered.
Prerefunded bonds were also unchanged in light activity. Prerefunded bonds, callable in 1995, were quoted at 5.55% bid, 5.50% offered, while bonds callable in 1996 were quoted at 5.60% bid, 5.55% offered near the end of cash trading.