Taylor Riggs

The tax-exempt market appeared to find its footing this week as buyers felt comfortable entering the market as the Treasury market showed stability.

The tax-exempt market was stronger again Friday morning, riding the wave of a higher Treasury market over the past few sessions.

With more buying conviction than the market has seen in months, the municipal bond market posted strong gains as yields on triple-A benchmark scales fell as much as eight basis points.

The municipal bond market climbed higher in price as light supply and expected slowing in outflows from municipal bond funds created an opportunity for buyers.

The tax-exempt market made a definitive shift Thursday morning with the market posting gains as traders said yields were high enough to finally look attractive to buy.

Activity in the secondary market picked up Wednesday with waning demand in the primary markets as traders said buyers were cautious ahead of continued outflows from municipal bond funds, next week’s Federal Reserve meeting, and negative headlines from Puerto Rico and Detroit.

Traders in the tax-exempt market said the secondary was more active Wednesday as additional buyers and sellers jumped in to participate. Still, traders were hesitant to call the market stronger.

Investment grade tax-exempt bonds showed small improvements Wednesday morning, following a firmer Treasury market, though high-yield bonds continued to drop in price.

A majority of the week’s largest new issues priced in the municipal bond market Tuesday, bringing in demand from buyers on the short-end of the curve.

Traders in the tax-exempt market focused on new issues in the primary market Tuesday as most yields were lowered on bonds maturing within 10 years.

The week's largest deals began to price Tuesday morning, pulling buying interest to the primary market and allowing munis to outperform a weaker Treasury market.

Several new issues pricing Monday lured retail buyers into the municipal bond market as yields fell with Treasuries. Munis were stronger for a second session, extending gains following Friday’s worse-than-expected employment report.

The tax-exempt market continued to post gains Monday, though it underperformed its Treasury counterparts, as retail buyers were offered several deals in the primary market over $100 million.

The tax-exempt market held onto gains made Friday as the week opened with a mostly steady tone.

The municipal bond market posted gains Friday for the first time in a week, edging higher after worse-than-expected employment data pushed investors into safe-haven assets.

A small pause in rising municipal bond yields Friday afternoon wasn’t enough to give traders conviction the rally would continue with supply expected to increase in September.

The municipal bond market took direction from secondary trades and Treasuries this week as a light new-issue calendar took a back seat.

In a reversal, the tax-exempt market posted small gains Friday morning as Treasury yields fell on worse-than-expected jobs numbers.

Activity dropped off significantly in the primary and secondary markets this week as Labor Day and the Jewish holiday Rosh Hashanah kept traders from taking any big positions in the market.

Tax-exempt traders described the market as a being in a “muni malaise” Thursday afternoon with continued selling pressure and very few buyers interested.