The tax-exempt market opened Monday morning on a quiet note as traders had a hard time getting back to work. With limited issuance for the third week in a row, the primary market isn't able to provide direction.

"Listen carefully," a Chicago trader said. "Listen to this. What do you hear? Nothing."

The trader said the market is very quiet in morning trading. "I think people are testing the market," he said. "Some guys bought some things at the end of last week that are flexible and they are seeing where the bid side is today. It's a testing day."

He added most of the direction will come from the secondary market with the primary market providing no direction. "There is nothing significant in the primary. It seems like we have peripheral stuff and nothing epic or market changing. Again, we don't have a lot of leadership in underwriting yet so we have to be led by secondary trading."

In the primary market this week, $3.74 billion in issuance is expected, up from last week's revised $1.40 billion. In the negotiated market, $2.33 billion is expected to be priced, up from last week's revised $709.3 million. On the competitive calendar, $1.41 billion is expected to be auctioned, up from last week's revised $686.5 million.

Ramirez & Co. is expected to price for retail $238 million Dormitory Authority of the State of New York lease revenue bonds for state university dormitory facilities, rated Aa2 by Moody's Investors Service and AA-minus by Standard & Poor's. Institutional pricing is expected Tuesday.

On Friday, the 10-year Municipal Market Data yield closed steady at 1.78% while the 30-year yield finished flat at 2.92%. The two-year closed at 0.29% for the 31st consecutive session.

Treasuries were mostly flat. The two-year was flat at 0.26% while the benchmark 10-year was steady at 1.67%. The 30-year yield rose one basis point to 2.84%.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.