The tax-exempt market continued to firm Friday morning, extending gains into a fourth trading session.
Most of the new deals were priced in the primary market earlier in the week and so traders focused their attention to the secondary market.
"The market is better today," a New York trader said, adding New York Metropolitan Transportation Authority bonds priced this week were trading Friday. "We are keeping busy."
On Thursday, the 10-year Municipal Market Data yield plunged five basis points to 1.81% while the 30-year yield fell four basis points to 2.95%. The two-year closed at 0.29% for the 40th consecutive session.
The gains pushed muni yields back down to levels last seen on Sept. 11, erasing losses and then some after the Fed announced QE3.
Treasuries were mostly steady Friday morning. The two-year and benchmark 10-year yields were flat at 0.27% and 1.78%, respectively. The 30-year yield rose one basis point to 2.97%.