The municipal market was weaker yesterday, following Treasuries. Traders said tax-exempt yields were higher by four to six basis points overall.

"Munis were pretty much just picking up where they left off yesterday," a trader in Los Angeles said. "It was going to be difficult to sustain the rally for as long as we did, and now that things started cheapening up the beginning of this week, and even if you go back to very late last week, take that and put it together with Treasuries going down, and you've got some momentum for us to give back some of those gains. It still feels a little better than yesterday, but we're down a good five or six basis points, maybe a little more in spots."

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