The tax-exempt market continued to weaken Thursday morning, continuing the trend of the week, though traders noted the movement was more a correction than a panicked selloff.

"Weakness persists in the muni market," wrote Dan Toboja, vice president at Ziegler Capital Markets. "The last several days have seen a selloff in munis. Although it's been far from a fire sale there's been about a 10- to 15-basis-point cheapening over the last three trading sessions."

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