NEW YORK - The tax-exempt market got off to a slow start Monday morning as traders had a tough time getting back to work.

"The market is dead," a New York trader said, adding that most of the big new deals are expected to price starting Tuesday.

The Municipal Market Data scale was not updated by press time. On Friday, the 10-year yield ended steady at 1.86% for the sixth consecutive trading session while the two-year ended steady at 0.32% for the 16th straight session. The 30-year yield finished up one basis point to 3.16%.

Treasuries were much stronger Monday. The benchmark 10-year yield and the 30-year yield each dropped seven basis points to 1.81% and 2.68%. The two-year was steady at 0.32%.

In the primary market this week, $8.11 billion in municipal bonds are expected to be priced, down from last week's revised $9.03 billion. In negotiated deals, $6.49 billion is expected, down from last week's revised $7 billion. On the competitive calendar, $1.62 billion is expected to be auctioned, down from last week's revised $2.03 billion.

Over the course of last week, muni-to-Treasury ratios fell as munis outperformed Treasuries and became relatively more expensive. The two-year ratio dropped to 100% on Friday from 106.7% on Monday. The 10-year ratio fell to 110.7% on Friday from 117.7%. The 30-year ratio dropped slightly to 114.9% from 118% at the beginning of the week.

In economic news, sales of new single-family houses rose 7.6% in May to a seasonally adjusted annual rate of 369,000. The May figure beat the 346,000 median annual rate economists had expected. It was the highest rate since April 2010 when 422,000 new homes sold.

"Through the volatility we have more signs that housing has stabilized and that new construction activity is on a very gradual recovery path," wrote economists at RDQ Economics. "We would note that all regions have seen increases year-over-year in new home sales and that home prices are up year-over-year in each of the last four months. The supply of unsold homes in relation to sales is a very manageable 4.7 months of sales, which probably accounts for the firming in home prices."

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