The tax-exempt market continued to weaken for the fifth session Friday. Traders said the market was cheapening, though many participants were hanging out on the sidelines waiting for the dust to settle after a tough few trading sessions.

"Today is still weaker," a New York trader said. "Thursday there was a very strong bid-wanted activity which added to people's fear of others coming out and selling large blocks of pretty much all different structures. So it's weaker today, but I think a lot of people have now moved to the sidelines to wait and see where things settle at this point."

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