Some large bid-wanteds dotted municipal bond traders' screens Thursday morning, but few market participants have stepped up to buy, thus far.

The market has struck a weaker tenor early in Thursday's session, with yields backing up by up to four basis points in the four to 11 year range, according to one market gauge. But light activity supports a true selloff and dealers are discouraged from cheapening up their bond prices now, a trader in New York said.

"There's not a whole lot of movement; I haven't seen any of posts on any of the scales," he said. "I don't expect much to occur, especially considering this back-up here. People would be hesitant to jump on this bandwagon; dealers aren't inclined to back up their levels."

Trading Thursday will most likely stem from the residual effects from news the Federal Reserve delivered more than any expected supply. The Federal Open Market Committee announced Wednesday it would cut the rate of its purchases of longer-term Treasuries and mortgage-backed securities to $75 billion per month from $85 billion per month.

Many muni traders acknowledged they had priced into the market the gradual tapering of the Fed's bond buying especially over the past couple of weeks, but really as far back as May. But the effects on yields began to show Wednesday following the announcement.

Industry watchers anticipated a far lighter load of new issues on the week. Potential muni volume fell to an estimated $2.59 billion, compared with the hefty $10.63 billion of sales that arrived last week. The week's largest issues have already priced.

Yields on the Municipal Market Data triple-A scale Thursday were steady through two years on the curve, but rose up to four basis points thereafter. They appeared weakest between four and 11 years on the curve.

The triple-A, tax-exempt 10-year closed Wednesday one basis point higher at 2.71%. The 30-year rose two basis points to 4.16%. The two-year yield held at 0.33% for a 24th consecutive session.

Yields on the Municipal Market Advisors benchmark triple-A scale weakened mostly beyond two years on the curve by up to two basis points. The 10-year and the 30-year inched up one basis point each to 2.74% and 4.40%, respectively. The two-year held at 0.36%.

Treasury yields across much of the curve resumed their climb early Thursday, continuing on an upward trajectory Wednesday. The benchmark 10-year yield has leapt four basis points to 2.93%, while the two-year has jumped four basis points to 0.38%. The 30-year yield has held at 3.90%.

In economic news, the Labor Department reported Thursday that initial unemployment claims climbed by 10,000 to 379,000 during the Dec. 14 week. The numbers are generally less reliable than usual due to the holidays and seasonal difficulties with adjusting the readings.

In addition, this month's Federal Reserve Bank of Philadelphia Report on Business showed that the region's manufacturing sector grew at a slightly faster pace in December. The general business conditions index rose to 7.0 from 6.5 in November. Economists surveyed by Thomson Reuters estimated a reading of 10.0 for the index.

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