The tax-exempt market was busy Wednesday morning as many new issues hit the market and traders were bumping prices to pocket gains.

"We are pushing them up a couple of basis points," a New York trader said. "There are a few new deals that are being priced and things are getting more aggressive. Deals that are being priced are getting done."

To be sure, a few deals are being repriced higher, and this trader said if they continue this uptrend, he won't participate. "We are starting to lose interest if they are being pushed too much."

In the primary market, Citi is expected to price $443.3 million of Chicago O'Hare International Airport passenger facility charge revenue refunding bonds in two series, rated A-minus by Standard & Poor's and A by Fitch Ratings. The first series should consist of $113.7 million, followed by a second series of $329.6 million subject to the alternative minimum tax.

JPMorgan is expected to price $294.5 million of Arizona Health Facilities Authority hospital revenue refunding bonds, for the Phoenix Children's Hospital, rated BBB-plus by Standard & Poor's.

RBC Capital Market is expected to price $250 million of Los Angeles County Metropolitan Transportation Authority proposition A first tier senior sales tax revenue refunding bonds, rated Aa2 by Moody's Investors Service and AAA by Standard & Poor's.

On Tuesday, the 10-year Municipal Market Data yield jumped three basis points to 1.90% while the 30-year yield rose one basis point to 3.02%. The two-year closed at 0.29% for the 19th straight session.

Treasuries were stronger Wednesday morning as fears over Europe resurfaced. The benchmark 10-year yield dropped five basis points to 1.76% while the 30-year yield plunged six basis points to 2.85%. The two-year yield fell one basis point to 0.29%.

In economic news, existing home sales rose 2.3% in July to a seasonally adjusted 4.47 million-unit rate. The increase fell short of economists' expectations of 4.52 million sales in July.

In other economic news, the Federal Open Market Committee minutes are expected to be released in the afternoon.

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