The tax-exempt market was steady on Monday morning as traders said summer vacations continued to take market participants away from their desks.

"It's dead and slow," a New York trader said. "It's a Monday and there are summer vacations." He added that muni yields were flat from Friday's levels.

In the primary market this week, $5.40 billion is expected to come to market, down from last week's revised $6.30 billion. In negotiated deals, $4.16 billion is expected to be priced, up from last week's revised $3.99 billion. On the competitive calendar, $1.24 billion is expected to be auctioned, down from last week's revised $2.31 billion.

On Friday, the 10-year Municipal Market Data yield fell one basis point to 1.76% while the 30-year yield dropped two basis points to 2.92%. The two-year finished steady at 0.29% for the 12th consecutive session.

The Treasury yield curve flattened. The two-year yield increased one basis point to 0.28%, but the benchmark 10-year yield dropped one basis point to 1.65% while the 30-year yield fell two basis points to 2.73%.

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