The tax-exempt market continued to see extremely quiet trading as market participants said very little was going on.

"It's absolutely dead," a Chicago trader said. "There is no calendar this week - it's dismal. The secondary is trading by appointment. It's just one of those days. But it's expected. The Monday after Super Bowl is the least productive work day of the year."

The lack of a primary calendar isn't helping to spur activity. The municipal bond market can expected $4.79 billion in new issuance, down from last week's revised $5.98 billion. In negotiated deals, $2.96 billion is expected to hit the market, down from last week's revised $4.48 billion. On the competitive calendar, $1.83 billion is expected to be auctioned, up from last week's revised $1.6 billion.

"The dealers that are holding inventory should be able to move some with so little to choose from on the primary," wrote Dan Toboja, vice president at Ziegler Capital Markets. "Until the inflows reverse, yields will continue in the range they've been."

Municipal bond market reads showed a steady market Friday after a slightly stronger Thursday.

Yields on the Municipal Market Data triple-A GO scale finished unchanged across the yield curve. The 10-year yield closed at 1.82% for the third session while the 30-year closed at 2.86% for the second session. The two-year held at 0.34% for the fifth session.

The Municipal Market Advisors 5% coupon triple-A benchmark scale also showed unchanged yields. The 10-year yield and the 30-year yield held at 1.84% and 2.94%, respectively, for the third consecutive trading session. The two-year closed unchanged at 0.35% for the fifth session.

Treasuries continued to gain Monday afternoon. The benchmark 10-year yield and the 30-year yield dropped four basis points each to 1.97% and 3.17%, respectively. The two-year was steady at 0.27%.

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.