Peter Coffey of Smith Barney Asset Management

While it's uncertain whether the newly introduced Euro currency will affect the U.S. municipal market, Peter Coffey, managing director and portfolio manager at Smith Barney Asset Management, said he tracks exchange rates, which tend to affect the Treasury market and, in turn, municipal bonds.

Globalization of financial markets has become more prevalent in the last decade, forcing strategists to take a closer look at foreign indices.

"Ten years ago, globalization just wasn't a big deal. We may have been affected, but most of it was what was going on right here," Coffey said.

However, because municipal issuers are somewhat removed from financial crises overseas, the tax-exempt market tends to have a muted response to such events, he said. "I think it's wrong to characterize that we're insulated ... because the overall level of interest rates is going to dictate," he said.

"Now you have foreign cash flows, the advent of the Euro - there's a possibility that that's ultimately going to be competitive with the dollar for foreign reserves, and that could put some pressure on Treasuries," he said.

Closer to home, he keeps a pulse on the Treasury market and manufacturing to gauge movements in the municipal market. Also, commodities have been fairly well correlated to interest rates in the past, Coffey said.

"I watch the numbers, but I don't have something where we're absolutely tracking it," he said.