The tax-exempt market weakened Monday afternoon as munis took direction from Friday's weaker Treasuries. The market started to drift away from record low yields set last with as there were no major pricings of new deals and August reinvestment money has yet to hit the market.

"Everyone was expecting the market to be weaker given what happened Friday in Treasuries," a trader located in the Southwest region said. "But, syndicates are firm and they are better than other pricings. It's slow from a retail standpoint, but there is still business going on. There is August 1 money coming in and supply is not overwhelming so no one is going to panic here."

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