Taylor Riggs

The markets will look at big deals Tuesday for direction as retail buyers continue to wait to jump into the market.

It was a typical quiet Monday as yields remained unchanged across most of the curve.

NEW YORK – It was a typical quiet Monday as yields remained unchanged across most of the curve.

Afternoon trading activity picked up as deals from last week were making headlines in the secondary market.

Trading was quiet Monday morning as yields held steady.

After several weeks of relatively high volume, municipal issuance isn't cooling off just yet, with $7.37 billion expected to come to market, down only slightly from last week's revised $7.71 billion.

While the low-volume environment has made municipal bond underwriting all that more competitive, a few investment banks that focus on smaller deals - those under $10 million - have been able to jump dramatically in the rankings.

With the transportation sector highly correlated with the broader economy, airports are looking to gross domestic product and unemployment estimates to determine their own levels of performance.

Assured Guaranty has followed in the footsteps of bond insurers MBIA Inc. and Ambac Financial Group in suing Credit Suisse over soured mortgage-backed securities.

Assured Guaranty has sued DLJ Mortgage Capital and Credit Suisse, claiming breach of contract over $1.8 billion of mortgage-backed securities it insured.

While larger law firms have mostly kept their top-10 spots in the municipal bond counsel rankings, it's the smaller firms that have made a splash this year.

Though municipal yields are rising across the curve from September's record lows, issuers are bringing more debt to market. A total of $6.68 billion is expected in the primary this week, up from last week's revised $4.49 billion.

U.S. municipal borrowers should be grateful for Dexia Group's bailout last weekend.

The municipal market will see about $1 billion less in new issuance this week after struggling to digest last week's supply as yields rose across the curve, forcing some issuers to stay on the sidelines until yields fall again.

With the municipal underwriting landscape in flux due to low supply and record low yields, smaller investment banks are jumping into the muni bond underwriting business to get a piece of the action.

While Dexia Group has a substantially reduced its footprint in the U.S. municipal market, its lingering financial woes are still a thorn in the side for some bond issues exposed to the troubled Franco-Belgian lender.

Reports that Dexia Group is in need of another bailout should have little impact on the U.S. municipal bond market as issuers have been steadily reducing their exposure to the troubled Franco-Belgian lender.

With municipal bond issuance down 35% for the first three quarters of the year, the underwriting business remains competitive as banks reach for whatever deals may be available.

Municipal issuance for the first three quarters of the year is still down relative to last year, but the gap is closing quickly.

The municipal market can expect $8.26 billion of new issues this week, a slight increase from last week, despite rising yields across the curve.