The tax-exempt market posted even more gains on Thursday, extending an eight-session streak of lower yields.

Muni traders said new issues were very well received this week, deals were oversubscribed, and yields were lowered in repricings. With limited supply expected next week ahead of Thanksgiving, the tone of the market isn't expected to reverse anytime soon.

"The market has gone straight up since Hurricane Sandy," a New Jersey trader said. "Yields are grinding lower."

He said new deals have gone well this week but he has participated more in the secondary. "There were a lot of new issues last week but this week is more about the secondary. The secondary has moved up the last three days after the holiday weekend and it's active."

The New Jersey trader said he is finding better deals in the secondary market than in the primary.

"The continued up bid-sides persists and demand remains solid," wrote Dan Toboja at Ziegler Capital Markets. "New issues were oversubscribed and deals were being bumped."

He added he has noticed a spread differential between retail and institutional coupon structured bonds. "Deals have historically focused on the institutional side and were little concerned about bifurcating maturities. Deals over the last several months are being aggressively marketed toward retail buyers. Bonds with lower coupons and dollar prices are being widely purchased by dealers and trading vehicles with the intention of putting bonds back into retail systems."

He added, "As long as the market remains stable, especially on the long end with the muni curve flat on a historical basis, retail will continue to support the market. If retail begins to pull away from munis, whether due to headline risk, credit risk, inflation, equity strength, stability in Europe, or any reason the 'correction' that many participants are expecting may be quick."

In the primary market, JPMorgan priced $2.6 billion of New Jersey tax and revenue anticipation notes, rated MIG 2 from Moody's Investors Service, SP-1 from Standard & Poor's, and F1 from Fitch.

The bonds had a 2.5% coupon in 2013. Prices were not yet available.

JPMorgan priced $813.3 million of Texas Transportation Commission Central Texas Turnpike System bonds, rated Baa1 by Moody's, A-minus by Standard & Poor's, and BBB-plus by Fitch.

The first series, $588.2 million of first tier revenue refunding bonds, were priced at par to yield 4% in 2038 and 3.63% with a 5% coupon in 2041. The bonds are callable at par in 2022.

The second series, $225 million of first tier revenue put bonds, was priced at par to yield 1.25% in 2042.

Goldman, Sachs & Co. priced for institutions $842 million of Hawaii general obligation bonds following a two-day retail order period. The bonds are rated Aa2 by Moody's and AA by Standard & Poor's and Fitch.

Yields on the first series, $444 million, ranged from 0.75% with 2%, 3% and 4% coupons in a split 2017 maturity to 2.58% with a 4% coupon in 2032. The bonds are callable at par in 2022.

Yields on the second series, $398 million, ranged from 0.75% with a 5% coupon in 2017 to 1.91% with a 5% coupon in 2024. The bonds are callable at par in 2022. Yields were lowered three basis points from preliminary pricing.

Morgan Stanley priced $229.7 million of Pennsylvania Housing Finance Agency single family mortgage revenue bonds, rated Aa2 by Moody's and AA-plus by Standard & Poor's.

The first series, $123.3 million of bonds subject to the alternative minimum tax, were priced at par to yield 0.40% and 0.48% in a split 2013 maturity to 3.35% in 2026. The bonds are callable at par in 2021.

The second series of $6.4 million was priced at par at 0.90% in 2013 and 1.05% in 2016.

The third series of $100 million was priced at par to yield 305% in 2027 to 3.70% in 2042. The bonds are callable at par in 2021.

In the competitive market, the New York City Transitional Finance Authority auctioned $921.9 million of revenue bonds.

Bank of America Merrill Lynch won the bid for $559.9 million. Wells Fargo won the bid for $130 million. RBC Capital Markets won the bid for $100 million. Citi won the bid for $100 million. Pricing details were not yet available.

Goldman Sachs won the bid for $32 million. The bonds yielded 0.74% with a 5% coupon in 2018.

In the secondary market, trades compiled by data provider Markit showed strengthening. Yields on Dallas, Texas, Independent School District 5s of 2023 plunged five basis points to 1.74% while Indianapolis Local Public Improvement Board zeros of 2025 dropped four basis points to 3.05%.

Yields on Sacramento Transportation Authority 5s of 2027 and California Statewide Communities Development Authority of 2047 each fell three basis points to 2.20% and 3.99%, respectively. Yields on Dallas Area Rapid Transit 5s of 2032 also dropped three basis points to 3.08%.

The Municipal Market Data scale has been setting new record low yields with each passing day this week and that trend continued Thursday. The MMD scale posted gains Thursday for the eighth consecutive session and record low yields were set yet again.

The 10-year yield dropped three basis points to a new record low yield of 1.51%. The record beat the 1.54% set Wednesday and the 1.55% set Tuesday.

The 30-year MMD yield plummeted five basis points to 2.55%, also setting a new record low. The 2.55% low beat the previous record of 2.60% set Wednesday and 2.64% set Tuesday.

The two-year finished steady at 0.30% for the 35th consecutive trading session.

Treasuries were choppy Thursday and ended the session steady. The benchmark 10-year yield and the 30-year yield were flat at 1.58% and 2.72%, respectively. The two-year yield fell one basis point to 0.24%.

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