The tax-exempt market struggled to wake up Tuesday morning after the three-day weekend left trading sluggish to start.

"Munis are still sleeping," a New York trader said. "They are tired from the weekend. Any excuse to not do anything, the bond market will take it."

New deals should start pricing Wednesday. This week in the primary market, $4.03 billion is expected to be issued, down from last week's revised $7.19 billion. The negotiated market can expected $3.22 billion, down from last week's revised $5.77 billion. On the competitive calendar, $807.3 million should be auctioned, down from last week's revised $1.42 billion.

Friday, yields on the Municipal Market Data scale were steady. The 10-year and 30-year yields were unchanged at 1.90% and 3.08%, respectively. The two-year also finished flat at 0.29%.

Yields on the Municipal Market Advisors 5% scale showed yields steady to one basis point higher. The 10-year and 30-year yields were flat at 1.97% and 3.19%, respectively. The two-year was also unchanged at 0.35%.

Treasuries were weaker Tuesday, as equities rallied on better-than-expected consumer confidence. The benchmark 10-year yield jumped eight basis points to 2.09% and the 30-year yield increased seven basis points to 3.24%. The two-year yield rose one basis point to 0.27%.

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