NEW YORK – The tax-exempt market was weaker Tuesday morning for the sixth consecutive trading session as looming supply continues to throw the supply and demand balance off kilter.

“There is big supply coming,” a New York trader said. “It’s the same old story.”

Munis were weaker Tuesday morning, according to the Municipal Market Data scale. Yields inside four years were steady while the five- and six-year yield jumped up to two basis points. Yields on the seven- to 17-year rose between one and three basis points. Outside 19 years, yields jumped up to two basis points.

On Monday, the two-year yield finished steady at 0.36%. The 10-year and 30-year yields each rose two basis points to 2.28% and 3.46%, respectively.

Since munis started weakening last Tuesday, the two-year yield jumped nine basis points while the 30-year yield increased 17 basis points. The 10-year yield got hit the hardest, rising 26 basis points.

The two-year yield has not been this high since Jan. 11. The 30-year yield hasn’t risen to this level since Jan. 6. The 10-year muni hadn’t seen these levels since Nov. 17, 2011.

Treasuries were stronger Tuesday morning. The two-year and the benchmark 10-year yield each fell two basis points to 0.38% and 2.36%. The 30-year yield dropped five basis points to 3.44%.

In the primary market, JPMorgan is expected to price $430.8 million of Ohio general obligation bonds in three parts, rated Aa1 by Moody’s Investors Service and AA-plus by Standard & Poor’s and Fitch Ratings.

Morgan Stanley is expected to price $374.7 million of Wisconsin transportation revenue bonds, rated Aa2 by Moody’s and AA-plus by Standard & Poor’s and Fitch.

In the competitive market, New York City is expected to auction $470 million of GOs in two pricings – a $100 million deal followed by $370 million. The bonds are rated AA by Standard & Poor’s.

In economic news, housing starts fell 1.1% to a seasonally adjusted annual rate of 698,000 in February. The drop was to a level below the 700,000 expected by economists.

“Though single-family housing starts fell in February, this decline followed a surge in these starts in prior months,” wrote economists at RDQ Economics. “The leading building permits data are encouraging with permits rising to the highest level in almost three and a half years on broad-based gains by type and by region.”

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