The tax-exempt market opened weaker Tuesday morning, following Treasuries, as trading activity picked up ahead of pricings for large deals.

"It's weaker today just following Treasuries," a New York trader said. "There is more activity today than yesterday."

Traders looked to several large deals expected to price later Tuesday. Bank of America Merrill Lynch is expected to price for institutions about $1 billion of Massachusetts bonds, rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch Ratings.

In the second retail order period Monday, bonds on the first series, $400 million of general obligation bonds, were priced at par to yield 4% in 2043. Portions of bonds maturing between 2039 and 2043 were not offered for retail. The bonds are callable at par in 2021. Yields were raised five basis points on the 2043 maturity from Friday's retail pricing.

Bonds on the second series, $100 million of GO green bonds, yielded 3.85% with a 3.75% coupon and 3.67% with a 4% coupon in a split 2033 maturity. Portions of bonds maturing in 2022 were not offered for retail. The bonds are callable at par in 2021. Yields were raised five basis points from Friday's retail.

Yields on the third series, $457.7 million of GO refunding bonds, ranged from 0.64% with 4% and 5% coupons in a split 2016 maturity to 2.39% with 3% and 5% coupons in a split 2023 maturity. Bonds maturing in 2013 were offered via sealed bid. The bonds are callable at par in 2023. Yields were raised between five and eight basis points from the first pricing.

Goldman, Sachs & Co. priced $1 billion of County of Los Angeles tax and revenue anticipation notes, rated MIG-1 by Moody's, SP-1-plus by Standard & Poor's, and F-1-plus by Fitch.

The first series of $300 million yielded 0.16% with a 2% coupon in 2014. The second series of $700 million yielded 0.19% with a 2% coupon in 2014.

Siebert Brandford Shank & Co. is scheduled to price $284.5 million of city of Los Angeles Wastewater System revenue bonds, rated Aa2 by Moody's and AA-plus by Standard & Poor's and Fitch.

In the competitive market, Texas A&M University is expected to auction $295 million of revenue bonds in two pricings, of $255.6 million and $39.3 million, rated Aaa by Moody's and AA-plus by Standard & Poor's.

Monday, the Municipal Market Data scale flattened. The two-year yield increased one basis point to 0.30% and the 10-year yield fell one basis point to 2.08%. The 30-year was steady at 3.24%.

The Municipal Market Advisors 5% scale ended steady across the curve. The 10-year and 30-year yields finished unchanged at 2.14% and 3.34%, respectively. The two-year finished steady at 0.36% for the fourth session.

Treasuries were weaker Tuesday morning. The benchmark 10-year yield increased three basis points to 2.16% and the 30-year yield rose four basis points to 3.31%. The two-year was steady at 0.31%.

In economic news, the U.S. international trade deficit was $40.3 billion in April, up 8.5%, from the revised $37.1 billion deficit in March. The deficit was less than the $41 billion expected by economists.

"International trade does not appear to be shaping up as a significant factor for second-quarter economic growth with the April trade deficit in inflation-adjusted terms virtually unchanged from its first-quarter average," wrote economists at RDQ Economics. "The most active area of the trade accounts is the auto sector, where both imports and exports have risen strongly over the last three months. The most worrying area of the trade accounts from the perspective of the health of the overall economy is the capital goods area, where both imports and exports of capital goods have fallen over the last three months, which is not indicative of strength in capital spending."

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