The tax-exempt municipal market showed soft pockets along the yield curve on Friday as some traders returned from the holiday. Activity overall remained low, traders said.

"We'd all be better off calling football pools instead of trying to read the market," one Chicago-based trader lamented in an interview. "People out and a lack of supply has thrown a cold blanket over munis."

Yields on bonds maturing from 18-23 years out were softer, the trader said, with higher-grade bonds performing well.

According to the Municipal Market Data triple-A scale, yields softened. Bonds maturing from 2019 to 2026 rose as much as two basis points, and those maturing from 2032 to 2043 gained up to one basis point.

"We've seen a couple of trades today, it's not overwhelming," the trader said.

The 10-year Treasury yield hovered around 2.99% after touching 3% Thursday. Yield on the 30-year Treasury gained one basis point to 3.93%, while two-year dipped two basis points to 0.40%.

The weekly average yield to maturity of the Bond Buyer Municipal Bond Index, which is based on 40 long-term bond prices, was unchanged at 5.13% for the week ending Dec. 26, 2013, the highest since Oct. 24, 2013, (seven weeks ago), when it was 5.16%.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.