New deals will set the tone this week, participants said Friday, after the market posted losses in choppy trading for the third straight session.
Prices came off recent highs after Tuesday's consumer price index showed a surprise increase. Since then, both Treasury and municipal bonds wandered in a 1/2-point range as traders tried to determine the next significant move.
By session's end Friday, the course of the market was still unclear. Prices that were quoted down 3/8 to 1/2 point soon after the market opened were narrowly mixed by the end of trading.
Reflecting a slightly weaker bias, when Lehman Brothers removed syndicate restrictions from $332 million Illinois sales tax revenue bonds, they traded down about 1/4 point.
In late secondary action, the 5 1/4s of 2018 were quoted at 97-1/4 to yield 5.47%. where they were originally priced to yield 5.45%.
In other secondary dollar bond trading, South Carolina PSA FGIC 5s of 2025 were quoted at 5.34% bid, 5.32% offered; Washington Public Power Supply System 53/8s of 2015 were at 5.58% bid, 5.56% offered; and Florida MPA AMBAC 4 2/2s of 2027 were 88 1/4-3/4 to yield 5.24%.
Jacksonville Electric 5 1/4s of 2021 were quoted at 5.38% bid, 5.36% offered; New York State Power Authority 5 1/4s of 2018 were quoted at 99 1/2-100 to yield 5.28%; and Florida State Board of Education 5 1/4s of 2023 were at 98 1/2-3/4 to yield 5.35%.
In the debt futures market, the December municipal contract hit a low of 104.06 and a high of 104.24, but settled down 4/32 to 104.18. The MOB spread widened slightly to negative 464 from negative 460 Thursday.
With few economic reports due this week -- durable goods and housing starts top the list -- the fate of new offerings will likely set the tone for the rest of the market.
"We're trying to settle in here, but there's no clear direction," a trader said. "The fourth quarter calendar kicks off and that should tell us more about how to trade than anything."
Looking to supply, The Bond Buyer calculated 30-day visible supply Friday at $5.29 billion, up $#.14 billion from Thursday. The Blue List of dealer inventory rose $22 million to $1.38 billion.
The 30-day visible supply, is at its highest level since Aug. 24 when it was $6.01 billion. The Blue List climbed for the sixth consecutive day, hitting its highest level since Sept. 2, when it was at $1.45 billion.
Some sizable deals were added to the list of expected issues, including $800 million California various GOs, to be done the week of Sept. 28.
The negotiated sector also features $415 million Puerto Rico refunding bonds, to be priced by Kidder, Peabody & Co; $424 million New York State Dormitory Authority refunding revenue bonds, to be priced by Morgan Stanley & Co.; and $246 million Connecticut Development Authority weekly various pollution control revenue refunding bonds, to be priced by Goldman, Sachs & Co.
The Competitive calendar is dominated by $115 million Aurora, Colo., refunding bonds.
In the short-term note sector, Texas will sell $1.4 billion tax and revenue anticipation notes.
Weekly TablesMonday: Placement RatioWednesday: Bond-Call Calendar Bond ElectionsThursday: Municipal Activities Bond TendersFriday: Bond Buyer Indexes