Intermediate-range municipal bond yields slipped Friday on steady trading in the secondary market.

Another week of scant supply and the downward thrust of Treasuries dragged tax-exempt yields lower, though not dramatically. Market gauges showed active trading through the middle of the day’s session, which gave munis a firmer tone, a trader in Florida said.

“There’s a lot of activity, in general,” he said. “The market is up another two-to-three points today, depending on the issuer and maturity.”

The meager supply isn’t expected to last. Potential muni volume for this week should total $8.25 billion, up from sales of $4.39 billion last week, according to Ipreo, The Bond Buyer and Thomson Reuters numbers.

California buyers are anxious for the coming $1.61 billion state general obligation bonds JPMorgan is expected to price this week, a trader in Los Angeles said. But it likely won’t come cheap, he added.

“The Cal levels are a bit rich,” he said. “I know they’re probably a little more attractive than what they’ve been getting. But Cal GOs have just run up so much, they have a lot of ground to come back before I feel the bonds are attractive again.”

In the short term, investors anticipate a significant increase in volume. The Bond Buyer’s most recent 30-day visible supply showed $12.4 billion looming.

In the negotiated market Friday, Wells Fargo Securities priced $162.7 million of Stratford, Conn., taxable GOs. They were rated A1 by Moody’s Investors Service and AA by Standard & Poor’s.

The credits arrived structured as serials. Spreads to Treasuries ranged from 120 basis points in 2015 to 245 basis points in 2025. The deal includes terms in 2030 and 2038. The bonds are callable at par in 2023.

Fixed-income markets benefitted as the economy avoided what many predicted would be a disaster after Congress approved a spending measure to end a 16-day deadlock between Democrats and Republicans. Bond market investors have used the short-term reprieve to buy paper.

For the muni market, non-traditional investors have rapidly honed in on Puerto Rico credits, traders said. Yields on bonds from commonwealth issuers fell as much as 25 basis points late in the week, they added.

Beyond the commonwealth, the secondary market saw active block trading, figures from the Municipal Securities Rulemaking Board’s EMMA website showed. Through midday Friday, more than 215 large blocks traded hands in the market.

Tax-exempt yields on the triple-A Municipal Market Data scale showed firming by up to four basis points between four and 18 years.

The 10-year yield closed out the week two basis points lower at 2.60%. The 30-year held steady for a second straight session at 4.22%. The two-year remained at 0.35% for the sixth consecutive session.

Yields on the Municipal Market Advisors benchmark scale ended Friday up to one basis point lower. The 10-year yield ticked down one basis point to 2.75%. The 30-year yield held at 4.35%; the two-year stayed at 0.55% for the eighth straight session.

Treasury yields firmed across the curve. The benchmark 10-year and two-year yields each dipped one basis point to 2.58% and 0.32%, respectively. The 30-year yield fell two basis points to 3.65%.

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