The tax-exempt market ended on a slow note after a week that was described as mostly firmer by traders.

With little volume in the primary market, demand has outweighed supply over the past few weeks. Traders said deals were well received and there was a decent bid in the secondary throughout most of the trading sessions.

Still, the market noticeably slowed on Friday. "It's tough to get a good read," a San Francisco trader said. "I've seen things a little tighter."

Overall for the week, the trader said activity was light. "It seemed quiet this week. I haven't seen many deals I liked. We put in for a few of the Tampa, Fla., bonds but it was 10 to 15 times oversubscribed so we chose not to take our allotment."

Other traders agreed. "It's been very quiet today," a New Jersey trader said on Friday. "There was an OK bid most of the week but it started to fade a bit Thursday so today it's just extremely quiet."

He added the new issue calendar isn't expected to tick up next week. "It's a weak calendar so I don't see any big pickup in activity."

The trader added the majority of the calendar over the past three or four months has been refundings, and very little new money. "It's really a function of budget considerations for a lot of these municipalities," he said. "So if you don't have refundings in the picture, your calendar is going to be light. We expect a pickup at the end of the year but we don't see a lot of activity now due to a lack of refundings."

The trader in San Francisco agreed the calendar is light, but said it should activity should pick up as September progresses. "We are getting back into the swing of things after a slow August," he said. "The calendar is not looking great but it will start to pick up. I have heard some rumblings about the calendar picking up soon."

On Friday, the 10-year Municipal Market Data yield closed steady at 1.78% while the 30-year yield finished flat at 2.92%. The two-year closed at 0.29% for the 31st consecutive session.

Treasuries were stronger in the morning but pared gains by the afternoon on the long end as the yield curve steepened. The two-year yield fell one basis point to 0.26% while the 30-year yield jumped three basis points to 2.83%. The benchmark 10-year was steady at 1.67%.

In the secondary market, trades compiled by data provider Markit showed a mix of strengthening and weakening. Yields on Tennessee Energy Acquisition Corp. 5.25s of 2024 and California Department of Water Resources 5s of 2018 dropped three basis points each to 4.14% and 1.02%, respectively.

Other trades were weaker. Yields on Massachusetts Bay Transportation Authority 5s of 2020 and New York City Transitional Finance Authority 5s of 2029 rose two basis points each to 1.59% and 2.82%, respectively.

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