Ahead of the largest deals of the week pricing in the municipal bond market Wednesday, tax-exempts had a stronger tone.
"The secondary is much better than it had been and it seems like munis want to have a typical Fall," a San Francisco trader said, referring to a generally constructive tone in the fixed-income markets heading into the fourth quarter. "We are getting help from distance from Detroit, better price action on Puerto Rico, and so the credit news is not as amplified. Munis look cheap to Treasuries and it looks like money is finding its way into bonds. And supply is reduced."