QUICK EARLY WEEK COMMENT

Looks as though munis are in for some rough sledding as yields rose 8 bps in the intermediate and long end of the curve today. Not a lot was happening but from the get go you knew something had to give.  The MMD AAA curve gave and probably will continue to do so for a least another day. Pressure from sellers -- not many -- and with treasury rates opening higher had munis running for cover. As the day went on treasuries turned around and ended up in price - lower in yield  while munis did just the opposite. News out of DC was not favorable to munis with no BAB extension in sight (at least not yet). 

BABs are coming in droves this week and if the announcement that NY MTA will sell $750mm next week is a sign, it appears that this Christmas week could be very busy... highly unusual. Couple that with light staffing and you could have some bargains to buy in the market next week.  The MTA announced the deal today and stated that this deal is 45% of it's 2011 new money borrowing... and I bet that rings true with a lot of other issues in the past month. This could mean less issuance in munis next year. That would be a plus in this market environment. Another plus could be a low issuance January with large January reinvest dollars. Just the tonic munis may need to calm the fears.