The tax-exempt market continued its slow grind as there wasn't a lot of action to provide direction.
Traders continue to say that while yields remain so low, activity will stay stalled.
"Munis are down a bit," a New York trader said. "But it's a bit slow. People are complaining that munis are hard to trade right now."
In the primary market, Barclays is expected to price $155.4 million of Texas general obligation and water financial assistance bonds, rated triple-A by Moody's Investors Service and Fitch Ratings and AA-plus by Standard & Poor's.
Bank of America Merrill Lynch is expected to price $150 million of Massachusetts Housing Finance Agency bonds.
In the competitive market, Arkansas is expected to auction $225 million of federal highway grant anticipation and tax revenue general obligation bonds, rated Aa1 by Moody's and AA by Standard & Poor's.
Missouri is expected to auction $171.9 million of state water pollution and fourth state building GO refunding bonds in two series. The bonds are rated triple-A by Moody's and Fitch.
On Monday, the 10-year Municipal Market Data yield and the 30-year yield rose one basis each to 1.79% and 2.93%, respectively. The two-year closed at 0.29% for the 32nd consecutive session.
Treasuries were weaker Tuesday morning. The benchmark 10-year yield and the 30-year yield rose one basis point each to 1.69% and 2.84%, respectively. The two-year was steady at 0.26%.
In economic news, the U.S. international trade deficit was $42 billion in July, a 0.2% increase from the $41.9 billion deficit in June.
The deficit was smaller than the $44.2 billion estimated by economists and resulted from total exports of $183.3 billion and $225.3 billion of imports.
"From a narrow third-quarter real GDP perspective, trade starts the quarter at a very slight add to growth," wrote economists at RDQ Economics. "More importantly, despite the difficulties in the global economy, exports have risen at an 8.1% annualized rate over the last three months in inflation-adjusted terms, while imports have edged down slightly. With the ISM export orders index below 50 for three consecutive months through August, we would be surprised if U.S. exports can grow over the next three months at the pace seen over the last three."