The tax-exempt market weakened Monday afternoon, following Treasuries, as traders said munis played catch-up to the selloff last Friday.
After a better-than-expected jobs number, Treasuries sold off Friday and continued to weaken Monday.
"I saw a couple cheap prints this morning," an Ohio trader said, adding the market is fairly slow outside that. "Munis need to play catch up from the Treasury selloff last Friday and even more now that treasuries are a little leaky again today."
The Treasury yield curve steepened as yields on the long end rose. The benchmark 10-year yield increased two basis points to 1.77% and the 30-year yield jumped three basis points to 2.99%. The two-year yield fell one basis point to 0.22%.
On Friday, munis posted losses.
Yields on the Municipal Market Data triple-A GO scale finished as much as three basis points higher. The 10-year yield increased two basis points to 1.68% and the 30-year yield rose three basis points to 2.82%. The two-year finished flat at 0.29% for the 21st session.
Yields on the Municipal Market Advisors 5% scale ended as much as four basis points higher. The 10-year and 30-year yields increased three basis points each to 1.76% and 2.98%, respectively. The two-year finished unchanged at 0.32% for the 21st session.