The tax-exempt market showed major signs of slowing as the weekend approached and traders left for the holidays.
"It's extremely quiet today," a Virginia trader said. "Especially as the day goes by it's getting slower and slower. The muni market is basically taking cues from Treasuries at this point."
He added the market feels slightly firmer, following Treasuries, for the second consecutive session.
On Thursday, the Municipal Market Data scale ended firmer for the first time in December. The 10-year yield fell three basis points to 1.79% while the 30-year yield dropped two basis points to 2.84%. The two-year finished flat at 0.31% for the third consecutive trading session.
Despite the small gains, the 10-year MMD yield still remains 32 basis points above its record low of 1.47% set Nov. 28 while the 30-year is still trading 38 basis points higher than its record low of 2.47% also set Nov. 28.
Treasuries were stronger Friday after posting gains Wednesday and Thursday. The benchmark 10-year yield fell four basis points to 1.76% while the 30-year yield plummeted five basis points to 2.93%. The two-year was steady at 0.28%.
Data from the Municipal Securities Rulemaking Board also showed that as each day progressed, activity increased. On Monday, 47,443 trades occurred, above the 30-day average of 41,018. But par amount traded was only $11.024 billion, down from the 30-day average of $12.227 billion.
Tuesday's numbers improved. There were 56,147 trades on Tuesday, a big jump from the 41,702 30-day average. And par amount traded was up to $13.805 billion from the 30-day average of $12.404 billion.
Trading was in full swing by Wednesday as 56,239 trades took place, up from the 30-day average of 42,295. In par amount traded, $16.629 billion occurred, up from the 30-day average of $12.582 billion.
On Thursday, 51,785 trades occurred, up significantly from the 30-day average of 42,711 trades. Par value traded was also up to $15.650 billion, well above the $12.579 billion 30-day average.