Buyers in the municipal bond market looked to the front end of the curve for value, though traders said they were cautious about buying much of anything Thursday.

"The market is so choppy that it's buyer beware," a Texas trader said. "We are so interest rate sensitive that if Treasuries are choppy, you might think you have strategic pricing but then it might not work," he said, referring to deals pricing in the primary.

This trader added bonds on the short-end of the curve have been well received this week, particularly because of supply and demand. "You are getting a sharp yield curve. The institutions still have to place money so they are hedging their bets by buying short-term paper. But from a municipality standpoint, they are still pushing out to the terms because rates are good. So buyers like short-term, issuers like the long-end. The short stuff goes quick."

In the primary market, Bank of America Merrill Lynch repriced $156.4 million of Dallas, Texas, waterworks and sewer system revenue refunding bonds, rated Aa1 by Moody's Investors Service and AAA by Standard & Poor's.

Yields ranged from 0.50% with a 5% coupon in 2015 to 4.70% with a 5% coupon in 2042. Bonds maturing in 2014 were offered via sealed bid. The bonds are callable at par in 2023.

Yields were lowered as much as five basis points from preliminary pricing. Spreads on bonds with 5% coupons ranged from seven basis points to 33 basis points above Wednesday's Municipal Market Data scale.

Wells Fargo Securities priced $104 million of triple-A rated Charlotte, N.C., general obligation refunding bonds. Yields ranged from 0.46% with a 5% coupon in 2015 to 4.05% with a 4% coupon in 2029. Bonds maturing in 2014 were offered via sealed bid. The bonds are callable at par in 2023.

Spreads on bonds with 5% coupons ranged from three basis points to 15 basis points above Wednesday's MMD scale.

Wednesday, yields on the triple-A Municipal Market Data scale ended as much as four basis points higher. The 10-year yield rose three basis points to 2.93% and the 30-year yield increased four basis points to 4.44%. The two-year finished flat at 0.43% for the 26th straight session.

Yields on the Municipal Market Advisors scale ended as much as three basis points higher. The 10-year yield rose two basis points to 3.07% and the 30-year yield increased three basis points to 4.54%. The two-year was flat at 0.55% for the fifth session.

Treasuries continued to weaken on the short end of the curve Thursday afternoon. The two-year yield rose two basis points to 0.40% and the benchmark 10-year yield increased three basis points to 2.91%. The 30-year was steady at 3.90%.

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