Calif. Market Close: Tax-Exempts Finish Weaker; Fed Holds Rates

The municipal market was weaker today, as the Federal Open Market held the federal funds rate at 2%, while participants continue to deal with the fallout from Lehman Brothers’ Chapter 11 bankruptcy filing and news that Bank of America will purchase Merrill Lynch & Co.
Traders said tax-exempt yields were higher by about five basis points overall, though some bonds on the long end of the market are weaker by 10 or more basis points.
“We’re definitely weaker today, and it keeps getting weaker and weaker the further out you go,” a trader in Los Angeles said. “There wasn’t much trading today, but the trades that did happen were showing quite a bit of weakness.”
To read the column in its entirety, go to The Bond Buyer web site.
Michael.Scarchilli-AT-sourcemedia-DOT-com
Jack.Herman-AT-sourcemedia-DOT-com

Market Close: Munis End Weaker; FOMC Holds Fed Funds at 2%

The municipal market was weaker today, as the Federal Open Market held the federal funds rate at 2%, while participants continue to deal with the fallout from Lehman Brothers’ Chapter 11 bankruptcy filing and news that Bank of America will purchase Merrill Lynch & Co.
Traders said tax-exempt yields were higher by about five basis points overall, though some bonds on the long end of the market are weaker by 10 or more basis points.
“There are a couple of distressed trades bringing down the market, but there’s still not much going on,” a trader in Chicago said. “It’s still fairly illiquid, and it’s really just one or two big trades throwing things off. The threat of AIG trying to sell off municipal holdings is a pall that hangs over us, but the managers there know they can’t do that in an orderly fashion. There’s just not enough balance sheet available for others to take that on.”
To read the column in its entirety, go to The Bond Buyer web site.
Michael.Scarchilli-AT-sourcemedia-DOT-com
Jack.Herman-AT-sourcemedia-DOT-com

Market Post: Munis Weaker Ahead of FOMC

The municipal market was weaker this morning, as the Federal Open Market Committee holds its monetary policy meeting, despite a continued flight-to-quality rally in the Treasury market, as participants continue to deal with the fallout from Lehman Brothers’ Chapter 11 bankruptcy filing and news that Bank of America will purchase Merrill Lynch & Co.
Traders said tax-exempt yields were higher by three to five basis points overall, though some bonds on the long end of the market are weaker by 10 or more basis points.
To read the column in its entirety, go to The Bond Buyer web site.
Michael.Scarchilli-AT-sourcemedia-DOT-com
Jack.Herman-AT-sourcemedia-DOT-com