After a double-digit selloff in the municipal bond market last week, tax-exempts stabilized Monday morning along with Treasuries.

"It's feeling better than Friday," a Chicago trader said. "There are actually some bid sides for paper."

While the secondary is active, traders said they continue to focus on the primary for price discovery.

Later Monday, Ramirez & Co. is expected to price for retail $509 million of New York City Water Finance Authority second resolution revenue bonds, rated Aa2 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch Ratings. Institutional pricing is expected Tuesday.

"People are still focused on the primary but with some stability on the Treasury side there's no panic," the trader added.

On Friday, municipal bond market scales ended weaker for the fifth session.

Yields on the Municipal Market Data triple-A GO scale ended as much as eight basis points higher. The 10-year yield jumped five basis points to 1.99% while the 30-year yield increased six basis points to 3.08%. The two-year closed at 0.31% for the 14th straight session.

Yields on the Municipal Market Advisors 5% coupon triple-A benchmark scale also closed as much as eight basis points higher. The 10-year yield jumped six basis points to 1.99% while the 30-year yield soared seven basis points to 3.15%. The two-year was steady at 0.33% for the ninth session.

Treasuries were slightly stronger Monday morning, reversing losses posted last week. The benchmark 10-year yield and the 30-year yield fell one basis point each to 2.05% and 3.25%, respectively. The two-year yield also fell one basis point to 0.26%.

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