The municipal market opened Thursday's session with slightly lower yields following news that the U.S. government proved capable of stepping away from the financial abyss.

"The market's got a little better tone today," a trader in New York said. "We've got a little more supply coming in next week. We've got a little bit of a short-term relief rally, given the events in Washington. So, it's pretty clear that rates are going to be relatively low."

The economy received a last-minute reprieve from apparent financial disaster after the U.S. Congress approved a spending measure late Wednesday which the president quickly signed. The compromise ended the political standoff between Democrats and Republicans, returned federal employees to their jobs for the first time this month and ensured the federal government will not default on its debt obligations, at least until the early part of next year.

The muni market responded to the agreement that lifted the partial government shutdown with strength across all but the front end of the curve. Yields are heaviest between nine and 15 years and past 20 years, according to one market gauge.

"Bonds probably are not the worst place to be," the trader said. "Muni percentages backed up the last two or three days. So, munis are relatively attractive again."

In addition, volume is expected to climb. The Bond Buyer's 30-Day Visible Supply weighed in at $9.82 billion Wednesday.

Most of the largest deals for the week have already priced.

The bid sides on Puerto Rico debt continue to see a general firming since commonwealth officials made an investor call on Tuesday that ruled out bankruptcies from island issuers, the trader said.

Tax-exempt yields on the triple-A Municipal Market Data scale started Thursday as much as two basis points lower beyond five years.

On Wednesday, The 10-year and 30-year yields climbed three basis points each to 2.65% and 4.26%, respectively. The two-year held steady at 0.35% for the fourth straight session.

Yields on the Municipal Market Advisors benchmark scale ended as much as two basis points higher. The 10-year yield increased one basis point to 2.78% and the 30-year yield climbed two basis points to 4.39%.

The two-year was unchanged at 0.55% for the sixth consecutive session.

Treasury yields started the day lower on news that the U.S. government would not cross the debt ceiling limit.

The benchmark 10-year and 30-year yields have fallen five basis points each to 2.62% and 3.68%, respectively. The two-year yield has slipped two basis points to 0.32%.

In economic news, U.S. initial unemployment claims fell by 15,000 in the Oct. 12 week for a reading of 358,000, the Department of Labor reported Thursday. The number compares with the previous week's revised figure of 373,000, and 311,000 in mid-September.

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