The municipal market is benefitting from the absence of traders and brokers who are on vacation this week as Treasuries continue a slide that began last week. Without active participants, yields on tax-exempt bonds have largely remained steady even as Treasury rates weaken.

"The only thing we're seeing right now is a reaction in Treasuries, which have been down every day this week," a trader in New Jersey said in an interview. "With the Treasury and taper headlines, you'd think we'd slide a little bit, but a lot of people have closed the books for the year."

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