Traders appeared to be in vacation mode Monday afternoon as trading remained quiet at the start of this holiday-shortened week. And most market participants said activity wasn't likely to pick up anytime soon.

"We are just waiting for the first of the month to come with only three and a half days this week," a Chicago trader said. "We are not expecting much and today is pretty quiet. There are not a lot of bids and it's just grinding along."

He added that while it was quiet, the buy side was still in the market. "Demand is still there but most shops are only half staffed."

He added there weren't big enough deals expected to price this week to give much direction to the market.

Municipal bond scales ended as much as one basis point firmer Friday.

Yields on the Municipal Market Data triple-A GO scale ended one basis point stronger. The 10-year yield fell one basis point to 1.95% while the 30-year yield closed at 3.10% for the third consecutive session. The two-year finished flat at 0.31% for the 24th consecutive session.

Yields on the Municipal Market Advisors 5% coupon triple-A benchmark scale also ended as much as one basis point lower. The 10-year yield and the 30-year yield slid one basis point each to 2.00% and 3.19%, respectively. The two-year held at 0.33% for the 19th session.

Treasuries reversed morning losses to post gains by the afternoon. The benchmark 10-year yield slid two basis points to 1.90%. The two-year and 30-year yields fell one basis point each to 0.25% and 3.13%, respectively.

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