Activity in the tax-exempt market was slow Wednesday morning as traders awaited the biggest deals of the week, expected to hit the market later in the day. Fixed income assets were also relatively quiet ahead of the Federal Open Market Committee meeting announcement, expected in early afternoon.

"It's a little quiet this morning," a New York trader said.

The Municipal Market Data scale was not updated by press time. But on Tuesday, the 10-year tax-exempt yield held steady at 1.66%, hovering above its record low of 1.60% set July 26. The 30-year muni yield finished flat at 2.84%, five basis points above its record low of 2.79% set July 25. The two-year was steady at 0.29% for the fourth consecutive session.

Treasuries were weaker Wednesday morning. The benchmark 10-year yield and the 30-year yield each jumped four basis points to 1.52% and 2.60%, respectively. The two-year yield increased one basis point to 0.23%.

In the primary market, Goldman, Sachs & Co., is expected to price for retail $1.15 billion of Triborough Bridge and Tunnel Authority - known formally as MTA Bridges and Tunnels - general revenue refunding bonds. The bonds are rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.

Barclays Capital is expected to price for institutions $420 million of California State University Trustees system-wide revenue bonds, following a retail order period Tuesday. The credit is rated Aa2 by Moody's and A-plus by Standard & Poor's.

In retail pricing, yields ranged from 0.24% with a 2% coupon in 2013 to 3.85% with a 3.75% coupon in 2042. Bonds maturing in 2026, in between 2028 and 2031, and in 2037 were not offered for retail. The bonds are callable at par in 2022.

RBC Capital Markets is expected to price $249.1 million of Houston, Texas, Combined Utility System first lien revenue refunding SIFMA index floating rate bonds, rated AA by Standard & Poor's and AA-minus by Fitch.

On the competitive calendar, triple-A rated Maryland is expected to price $652.92 million of general obligation state and local facilities loan bonds in four pricings - $430 million and $187.6 million of refunding bonds and a taxable series of $20 million and $15.32 million.

In economic news, the ISM manufacturing index edged up slightly to 49.8 in July from 49.7 in June, failing to meet analysts' expectations of a rebound to 50.2.

"Another disappointing report on manufacturing activity that points to a further slight contraction in the sector in July," wrote economists at RDQ Economics. "The details of the July report are a little weaker than those in the June report as a rise in the inventory index roughly offset a drop in the employment index and we consider both of these to be somewhat unwelcome developments."

They added, "Importantly, with new orders below 50 for the second straight month, there is no suggestion that a rebound in manufacturing growth lies ahead for August."

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