NEW YORK – After a strong rally in the tax-exempt market last week, activity is calmer Tuesday morning as traders get back to work after a three-day weekend.

“It’s neutral to a better bid,” said a trader in New York, adding that activity felt muted due to the long holiday weekend. The market “feels like a breather.”

Muni yields were not updated by press time. But on Friday, the two-year closed steady at 0.35%. The 10-year yield closed down five basis points to 1.71%, beating the previous record of 1.76% as recorded by MMD Thursday. The 30-year dropped nine basis points to 3.20%, beating the previous record of 3.29% registered on Thursday.

Treasuries were steady in Tuesday morning trading. The two-year yield was flat at 0.23% and the benchmark 10-year yield held steady at 1.87%. The 30-year yield was 2.91%.

In the primary this week, the tax-exempt market can expect $3.45 billion, down from last week’s $4.19 billion. In the negotiated market, about $2.42 billion is expected to be issued, up from last week’s revised $2.03 billion. On the competitive calendar, $1.03 billion is expected to come to market, down from last week’s revised $2.16 billion.

On Monday, a $463 million Massachusetts new and refunding general obligation SIFMA index bond issue was added to the calendar. The deal will be priced by Citi and is expected to hit the market Wednesday.

Ratios finished lower for last week. The 10-year muni-to-Treasury ratio closed at 91.9%, down from 93.4% at the beginning of last week. The 30-year ratio finished at 110%, down from 114.2%. The five-year was up slightly at 102.5%.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.