Trading in the tax-exempt market continued to remain subdued Monday afternoon as traders said they were waiting for the primary deals to provide direction.

"The bids aren't good in the secondary so I don't know if people are waiting to see how deals come or what's going on," a Chicago trader said. "It's like this a lot on Mondays."

He added the secondary cleaned up at the end of last week and so there wasn't a lot to buy Monday afternoon.

In the primary market this week, $9.72 billion is expected to hit the market, up from last week's revised $5.21 billion. On the negotiated calendar, $7.79 billion should be issued, up from last week's revised $2.49 billion. In competitive deals, $1.93 billion is expected to be auctioned, down slightly from last week's revised $2.72 billion.

RBC Capital Markets priced $104.2 million of Northwest Independent School District taxable and tax-exempt unlimited tax refunding bonds for Denton, Tarrant, and Wise counties in Texas. The bonds are rated Aa2 by Moody's Investors Service and AA by Fitch Ratings. The bonds have a triple-A rating guaranteed by the Texas Permanent School Fund Guarantee Program.

RBC took indications of interest for the first pricing of $60.1 million of taxable bonds. Spreads ranged from 10 basis points to 140 basis points above the comparable Treasury yield maturing between 2014 and 2032.

Yields on the second pricing of $44.1 million of tax-exempts, ranged from 0.66% with a 5% coupon in 2017 to 3.20% with a 3% coupon in 2031. The bonds are callable at par in 2023.

Bonds with 5% coupons maturing between 2017 and 2022 were priced 10 basis points to 18 basis points above Friday's Municipal Market Data scale.

Municipal bond scales ended as much as 10 basis points stronger Friday after posting gains Wednesday and Thursday.

Yields on the Municipal Market Data triple-A GO scale ended as much as 10 basis points lower. The 10-year yield plummeted nine basis points to 1.71% while the 30-year yield dropped 10 basis points to 2.93%. The two-year yield fell two basis points to 0.29% after trading steady at 0.31% for 32 consecutive sessions.

Yields on the Municipal Market Advisors 5% coupon triple-A benchmark scale ended as much as nine basis points lower. The 10-year and 30-year yields fell nine basis points each to 1.79% and 3.05%, respectively. The two-year yield fell one basis point to 0.32% after trading steady at 0.33% for 27 sessions.

Treasuries continued to weaken Monday afternoon. The benchmark 10-year yield and the 30-year yield rose two basis points each to 1.72% and 3.89%, respectively. The two-year was steady at 0.23%.

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