Traders on a pre-holiday Thursday looked to the new year for direction in the tax-exempt market.

Traders agree that activity should pick up by mid-January. “As long as Treasuries stay where they are and we don’t get huge supply coming in, all indicators point to positive moving forward over the next month to six weeks,” a trader in Los Angeles said. “You’ve got January redemptions and as long as there are no surprises, we’ll be in good shape.”

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