After a steady session in the morning, municipal bonds continued to trade steady if not higher Thursday afternoon, participants said.

While some traders in the morning said dealers were hitting bonds lower, others said the market still felt stronger after steady gains throughout the week.

"I haven't seen a fall off," a Chicago trader said. "It's steady or stronger. The bid-side is pretty much as strong as it has been."

He added that in the secondary market, there is little supply on the long-end as most bonds have been picked over. "It's not as active but it's just as strong," he said, adding there was more trading on the short and middle portions of the curve.

The primary market was relatively quiet Thursday as the majority of the week's largest deals priced Tuesday and Wednesday.

On Wednesday, the Municipal Market Data scale ended higher for the fourth consecutive trading session. The 10-year and 30-year yields fell three basis points each to 1.65% and 2.69%, respectively. The two-year finished steady for the second session at 0.33%.

The 10-year yield still remains 18 basis points above its record low of 1.47% set Nov. 28. The 30-year yield trades 22 basis points above its record low of 2.47% set Nov. 28.

Treasury yields continued to climb Thursday afternoon. The benchmark 10-year yield jumped six basis points to 1.88% while the 30-year yield spiked up seven basis points to 3.08%. The two-year yield increased one basis point to 0.26%.

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