The municipal market was weaker yesterday despite Treasury gains. Traders said tax-exempt yields were higher by about five basis points.

"We're sort of drifting. I mean, there's some trading going on, but there's no real bid side out there," a trader in New York said. "It's just becoming more of an execution-type market, where if you have a customer looking for bonds, you can work a trade, but otherwise, it's really kind of dead without that. It's hard to trade when you've got no place to put the bonds and you've got a good chance of losing money on them."

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