Trading volume dropped Wednesday morning as the municipal bond market prepared for the Thanksgiving holiday.

As volume fell 35% compared to the average of the previous five Wednesday trading sessions, some traders said retail buyers took advantage of a lackluster market.

"We are selling some bonds into retail," a Boston trader said. "At the right price, retail is still a buyer."

Total par value of bonds traded Wednesday morning was $1.67 billion. Interdealer trading volume comprised 23.5% of all volume at $393.6 million. Dealers sold to customers $740.5 million and bought from customers $539 million.
On Tuesday, the triple-A Municipal Market Data scale ended as much as three basis points stronger, extending gains to a third consecutive session. The 10-year yield slid one basis point to 2.65% and the 30-year yield fell three basis points to 4.10%. The two-year closed unchanged for the ninth session at 0.33%.

Yields on the Municipal Market Advisors benchmark scale ended as much as two basis points firmer. The 10-year yield fell one basis point to 2.71% and the 30-year yield dropped two basis points to 4.34%. The two-year was steady for the second session at 0.37%.

Treasuries were mostly weaker on Wednesday after posting gains for three consecutive sessions. The benchmark 10-year yield rose three basis points to 2.74% and the 30-year yield rose one basis point to 3.81%. The two-year yield fell one basis point to 0.29%.

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