NEW YORK – The tax-exempt market was very quiet Monday morning as most traders recovered from a Super Bowl hangover. The primary calendar is expected to be very small this week, adding to the lull already in the market.

“Munis are very quiet,” said a New York trader.

The Municipal Market Data scale was not updated by press time. But on Friday, the two-year yield closed steady for its third consecutive trading session at 0.30%, remaining at its record low set Oct. 10. The 10- and 30-year yields jumped eight basis points each to 1.77% and 3.21%, respectively.

Since the most recent rally began Jan. 24, muni yields fell as much as 22 basis points across the curve up until Friday. The losses Friday erased gains munis made since Jan. 27.

Treasuries were stronger Monday morning on news that Greece made no progress over the weekend to come to a resolution of its fiscal crisis. The two-year and benchmark 10-year yields fell one basis point each to 0.24% and 1.93%. The 30-year yield fell two basis points to 3.13%.

This week, the tax-exempt market can expect a paltry $3.91 billion, down from last week’s revised $4.38 billion. On the negotiated calendar, $3.02 billion is expected, up from last week’s revised $2.94 billion. In competitive deals, $893.1 million is expected, down from last week’s revised $1.44 billion.

“With the 30-day visible supply sitting below a very manageable $7 billion, the only wild card is the Treasury market,” said Mark Cantrell, managing director of tax-exempt municipals at Piper Jaffray. “Without significant supply, municipals can withstand and perform with the daily gyrations in the Treasury market. However, a longer trend towards higher yields will drag municipals with them.”

Muni-to-Treasury ratios fell last week as munis outperformed Treasuries and became more expensive. The five-year ratio closed at 87.2% on Friday, down from 97.3% on Monday. The 10-year ratio fell to 90.8% on Friday from 92.4% on Monday. The 30-year ratio dropped to 102.2% from 106% on Monday.

The 10- to 30-year slope of the curve flattened last, falling to 145 basis points from 146 basis points on Monday. Since the beginning of the year, the curve has flattened from 169 basis points.

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