NEW YORK – The tax-exempt market was quiet Monday morning as traders waited for the largest deal of the week to be priced for retail: $2.72 billion from the Michigan Finance Authority.

“Munis are quiet as there is monster supply coming,” a New York trader said, adding activity will remain slow until the new deals in the primary market provides direction.

The Municipal Market Data scale was not updated by press time. But on Friday, the 10-year yield closed flat at 1.90% while the 30-year yield fell one basis point to 3.18%. The two-year was steady at 0.32% for the sixth consecutive trading session.

Treasuries were stronger than Friday’s levels. The benchmark 10-year yield dropped two basis points to 1.62% while the 30-year yield fell four basis points to 2.73%. The two-year was steady at 0.28%.

In the primary market this week, over $12 billion is expected to be priced, nearly twice last week’s revised $6.35 billion. On the negotiated calendar, $10.96 billion is expected to come to market, up from last week’s revised $4.52 billion. In competitive deals, $1.08 billion is expected to be sold, down from last week’s revised $1.83 billion.

In the negotiated market Monday, the Michigan Finance Authority is expected to price for retail $2.72 billion of unemployment obligatory assessment revenue bonds in two series. The bonds in both are rated triple-A by the major rating agencies.

Citi is expected to price the first series of $1.47 billion for retail, with an institutional order period Tuesday.

Bank of America Merrill Lynch is expected to price the second series of $1.25 billion for retail, following by an institutional order period Wednesday.

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