The tax-exempt market took a small breather Tuesday morning, trading mostly steady even as Treasuries rallied.
The bond markets were closed Monday for the Veterans Day holiday. Traders said after a big run-up last week, the market was quiet on the first open trading day of this holiday-shortened week.
"Not much is going on," a New York trader said. "It's kind of quiet. There was a big rally last week so this is probably a breather."
He added munis traded flat even as Treasuries gained.
In the primary market this week, $7.61 billion is expected, up from last week's revised $4.65 billion. The negotiated market can expect $6.63 million, up from last week's revised $3.69 billion. On the competitive calendar, the market can expect $985 million, up from last week's revised $965 million.
Later Tuesday, Jefferies & Co. is expected to price $209.8 million of Harris County, Texas, taxable and tax-exempt bonds, rated triple-A.
Goldman, Sachs & Co. is expected to price $58.5 million of North Carolina Medical Care Commission facilities revenue refunding bonds for the Wake Forest Baptist Obligated Group, rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's.
On Friday, the Municipal Market Data scale posted gains for the fifth consecutive session and record low yields were set. The 10-year yield dropped two basis points to 1.57%, setting a new low as recorded by MMD. The 1.57% record beat the previous record of 1.59% set Thursday. Before that, the record low was 1.60% set July 26.
The 30-year MMD yield fell three basis points to 2.66%, also setting a record low as recorded by MMD. The 2.66% record beat the previous record of 2.69% set Thursday and the 2.74% record set Wednesday. Before this week, the record was a 2.79% set July 25.
The two-year finished steady at 0.30% for the 32nd consecutive trading session.
Treasuries were stronger Tuesday as woes of the approaching fiscal cliff continue to force the risk-off trade. The benchmark 10-year yield and the 30-year yield dropped four basis points each to 1.58% and 2.72%, respectively. The two-year yield fell one basis point to 0.25%.