The municipal market was again firmer Friday. Traders said tax-exempt yields were lower by about three or four basis points overall.

"I know it's the first week of the year, and we're usually accustomed to conditions being pretty positive in years past, but this was certainly a really good week for munis," a trader in Los Angeles said. "It wasn't as firm today as the last couple of sessions, but we picked up another few basis points today, we had pretty solid demand all week, and conditions are just pretty good right now. We'll see how long it lasts, but there's definitely a pretty positive tone out there."

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