The tax-exempt market was in "hurry up and wait" mode as traders said a busy, weaker morning turned into a quiet, steady afternoon.
A Chicago trader said the market was very busy in the morning and looked like it was significantly weaker, but then yields stabilized in the afternoon.
"The morning looked like it had the potential to deteriorate because the 10-year Treasury yield was right at 2.00%, but it subsided and got leveled off," the trader said. "Now we're off a few basis points but only from inactivity. Not from anything else."
He added that the market is waiting for big news later in the week, including the Federal Open Market Committee meeting minutes and unemployment numbers. "We've got some things that could really make a difference as vulnerable as we are right now. The market is on the cusp. A little news either way or a little more weight on either side could hurt or help."
This week, the municipal bond market can expect $6.41 billion in new issuance, down from last week's revised $7.22 billion. The negotiated market can expected $4.59 billion, down slightly from last week's revised $4.76 billion. On the competitive calendar, $1.82 billion should be auctioned, down from last week's revised $2.46 billion.
Most reads on the municipal bond market showed weakening Friday.
The Municipal Market Data scale ended lower Friday. The 10-year yield jumped six basis points to 1.75% while the 30-year yield spiked five basis points to 2.79%. The two-year finished steady at 0.33% for the seventh session.
The Municipal Market Advisors 5% coupon triple-A benchmark scale also showed weakening. The 10-year yield rose five basis points to 1.77% while the 30-year yield jumped six basis points to 2.88%. The two-year was steady at 0.34% for the ninth consecutive trading session.
Treasuries traded weaker Monday afternoon. The benchmark 10-year yield and the 30-year yield jumped two basis points each to 1.98% and 3.16%, respectively. The two-year yield rose one basis point to 0.29%.