The tax-exempt market spent the day catching up to Tuesday’s big rally in Treasuries as muni yields fell throughout the belly of the curve and deals were oversubscribed.

“The market has a firm tone and it’s almost as if munis look to Treasuries and the longer the rates are down, the firmer the market goes,” said a trader in Los Angeles. “There were big adjustments in the 10-year, but overall there was not a lot of activity.” He noted that trading volume was light.

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