The municipal market started the week with a weaker tone, picking up right where it left off last week.

Yields appear around five basis points higher beyond the front end of the curve, traders say. Fear and uncertainty, in addition to the looming holidays, are hammering the market, a trader in New York said.

“There’s a lot of fear out there right now, whether it’s the fiscal cliff, last week’s ton of supply, or something else,” he said. “The bid side has dropped off. We’re off maybe four or five basis points. When you get a few days of this, people panic a little; they’re not used to this. It’s definitely weaker.”

The market closed out a rough five-day stretch on Friday, after absorbing the week’s heavy calendar with concessions. Traders expect an overhang of supply in the secondary market.

This week, a total of $2.39 billion is expected, compared with $10.6 billion last week. This breaks down into $2.08 billion of municipal bond sales scheduled for negotiated sale this week, versus a revised $8.41 billion that were sold last week. Bonds scheduled for competitive sale this week total $309.1 million, compared with $2.18 billion last week.

Among the week’s negotiated deals, Jefferies & Co. is expected to price between $550 million to $850 million of the Metropolitan Transportation Authority’s Triborough Bridge and Tunnel Authority senior and subordinate revenue bonds. Market conditions should determine the size of the deal. The bonds are rated A1 by Moody’s Investors Service and A-plus by Standard & Poor’s and Fitch Ratings.

A retail order period is expected Monday with pricing set for Tuesday. The credits should arrive structured as serials, term bonds and capital appreciation bonds with a maximum maturity of 2032.

Tax exempt yields started out the week as much as five basis points higher beyond seven years on the curve, according to one market estimate. The benchmark 10-year yield finished unchanged at 1.66%, but climbed 18 basis points throughout the week, Municipal Market Data numbers showed.

The 30-year yield jumped six basis points to 2.71%, and 23 basis points throughout the week. The two-year finished steady at 0.30% for the 55th consecutive trading session.

Treasuries opened the week slightly higher. The benchmark 10-year yield ticked up one basis point to 1.72%. The 30-year yield edged up one basis points to 2.88%. The two-year yield rose one basis point to 0.25%.

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