Moderate trading in the secondary market continues to characterize an otherwise quiet session for the municipal market Thursday.

Some market participants have noticed relatively decent activity around the 10-year range. Mostly, though, the day has been a quiet one, as befits the season.

"There's no trading today and there's no trading this week," a trader in Pittsburgh said.

The fiscal cliff continues to dominate conversations about the tax-exempt market. Market pros are preparing for higher taxes and for the possibility munis' tax-exempt status will be affected by negotiations in Washington.

The Christmas and New Year's holidays drastically cut primary issuance this week. The market should see an anticipated $2 million total long-term issuance, all on the competitive side of the market.

The numbers are a marked downward shift from last week's revised $3.14 billion. There was a revised $879 million in competitive offerings last week, coupled with a revised $2.26 billion in negotiated deals.

But the market estimate of $2 million easily would rank as the lowest on record at Thomson Reuters' database, which goes back to 1986. In fact, Thomson Reuters' database goes back to 1980, but explains that data collection was spottier then, leaving older numbers relatively unreliable.

The current record low for a single week during the period between 1986 and 2012 is the week of Jan. 1 through Jan. 4, 1986, in which $29.2 million reached the muni market. That, however, was due in part to the Jan. 1 effective data for the Tax Reform Act of 1985, which inspired a massive rush to market at the end of 1985 to beat the new municipal bond restrictions.

The lowest volume for the New Year holiday week was $222.3 million, which occurred during the span of Dec. 28, 2008, through Jan. 3, 2009. The lowest volume for the Christmas holiday week occurred on the week from Dec. 22 through Dec. 28, 2002, which was $273.4 million.

In the secondary, there were a couple of small customer bid lists in the morning, but there is nothing at the bid more than $5 million bonds.

Tax-exempt yields continue to be steady through six years and beyond 19 years, according to one market read. Between seven and 19 years they are flat to three basis points lower, with the most notable drop falling around nine to 12 years.

The Municipal Market Data triple-A yield curve ended Wednesday's session unchanged, following flat trading on Monday. The benchmark 10-year triple-A yield closed steady at 1.77% for the third consecutive trading session.

The 30-year yield also closed flat at 2.83% for the third session. The two-year finished unchanged at 0.31% for the sixth consecutive trading session.

Treasury yields crossing noon on Thursday have fallen past the front end of the curve. The benchmark 10-year yield has dropped three basis points to 1.72%. The 30-year yield has decreased four basis points to 2.89%. The two-year is unchanged at 0.27%.

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