NEW YORK – The tax-exempt market weakened for its seventh consecutive trading session as muni buyers dried up and bids-wanted remain high.

“There is a ton of secondary supply that has continued to weigh on the market,” a New York trader said. “More than there’s been in awhile. We are waiting for capitulation in the market.”

He added muni traders keeping cutting bonds prices, following the drop in Treasuries in recent weeks, although they’re up Wednesday. “The Treasury has had the biggest decline in a long time.”

Munis were steady to slightly weaker Wednesday morning, according to the Municipal Market Data scale. Yields on the three- to five-year rose up to two basis points while yields outside six years were steady.

On Tuesday, the two-year yield finished steady at 0.36%. The 10-year yield jumped five basis points to 2.33% while the 30-year yield increased one basis point to 3.47%.

Since munis started weakening last Tuesday, the two-year yield jumped nine basis points while the 30-year yield increased 18 basis points. The 10-year yield has been hit the hardest, rising 31 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. 9. The 10-year muni hadn’t seen these levels since Nov. 16, 2011.

Treasuries were stronger across the curve. The two-year yield fell two basis points to 0.38% while the 30-year yield dropped four basis points to 3.42%. The benchmark 10-year yield fell five basis points to 2.32%.

In the primary market, Goldman, Sachs & Co. is expected to price for retail $918.6 million of California State Public Works Board lease revenue bonds, rated A2 by Moody’s Investors Service and BBB-plus by Standard & Poor’s and Fitch Ratings.

JPMorgan is expected to price $452.8 million of New York Liberty Development Corp. revenue refunding bonds in three classes.

Citi is expected to price $367 million of Oregon general obligation bonds and certificates of participation, rated Aa1 by Moody’s and AA-plus by Standard & Poor’s and Fitch.

In the competitive market, Alexandria, Va., is expected to auction $63.5 million of general obligation bonds.

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