Tax-exempt traders described the market as "apathetic" as buyers and sellers in the secondary weren't convinced to push the market in either direction.
"No one cares about anything right now," a New Jersey trader said. "No one wants to buy or sell. The market is in limbo."
Still, he added trades were a touch weaker compared to Monday's levels.
In the primary Tuesday, the biggest deal priced in the competitive market as Louisiana auctioned $300 million of general obligation bonds in two pricings. The bonds are rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings.
Raymond James bought $169.3 million of taxable bonds. Pricing details were not available by press time.
Bank of America Merrill Lynch won the bid for $130.7 million of tax-exempts. Yields ranged from 0.40% with a 2% coupon in 2014 to 3.07% with a 4% coupon in 2033. The bonds are callable at par in 2023.
By afternoon, traders said all the bond were gone except $15 million in 2027 and $7 million in 2028.
"It's about 50 basis points off the MMD scale for the 4% coupons on the long end," a New York trader said, adding the 2025 maturity was about 30 basis points off and the 2026 maturity was plus 40 basis points. "They are not rewarding you much in terms of yield as you go longer, but they are rewarding you in terms of spread versus MMD."
This trader added that going from 2029 to 2030, the yield increases to 2.91% from 2.85%. But moving from 2028 to 2029, the yield jumped to 2.85% from 2.67%. "You don't get as much bang for your buck from 2029 to 2030 as you would from 2028 to 2029. That seems to be the sweet spot."
Elsewhere in the primary market, Loop Capital Markets priced $164.4 million of Houston Combined Utility System first lien revenue and refunding bonds, rated Aa2 by Moody's and AA by Standard & Poor's.
Yields ranged from 0.28% with a 0.5% coupon in 2014 to 3.33% with a 5% coupon in 2043. The bonds are callable at par in 2023.
Morgan Stanley held preliminary pricing for $147.5 million of Illinois Finance Authority revenue bonds for the University of Chicago, rated Aa1 by Moody's, AA by Standard & Poor's, and AA-plus by Fitch.
The bonds yielded 0.46% with a 4% coupon in 2015, 3.02% with a 5% coupon in 2034, 4.10% with a 4% coupon in 2049, and 3.40% with a 5.25% coupon in 2052. The bonds are callable at par in 2023.
Citi is expected to price $147 million of Maryland Health and Higher Educational Facilities Authority revenue Medstar Health issue bonds, rated A2 by Moody's, A-minus by Standard & Poor's, and A by Fitch.
Municipal bond scaled ended up to six basis points weaker Monday after posting losses Friday.
Yields on the Municipal Market Data triple-A GO scale finished as much as six basis points higher. The 10-year and 30-year yields jumped five basis points each to 1.73% and 2.87%, respectively. The two-year finished flat at 0.29% for the 22nd session.
Yields on the Municipal Market Advisors 5% scale ended as much as five basis points higher. The 10-year and 30-year yields increased three basis points each to 1.79% and 3.01%, respectively. The two-year finished unchanged at 0.32% for the 22nd session.
Treasuries continued to weaken Tuesday afternoon. The benchmark 10-year and 30-year yields increased two basis points each to 1.79% and 3.00%, respectively. The two-year also rose two basis points to 0.24%.