Treasuries sacrificed morning gains derived from a weak August employment report to end lower Friday, but the municipal market proved a harder call. One analyst said yields on highgrade municipal issues improved slightly, while dollar bond prices ended unchanged to up 1/8 point. The market overall had been up as much a 3/8 Friday morning, he said. Activity was moderate in the morning, but turned "absolutely dead" by afternoon, the analyst said. A few traders however, pegged the market lower. "Some people, I think, were paying attention to the Columbia inflation index," one trader said. Though he judged the market unchanged to down 1/4 point, the trader said mere was "nothing really to prove it." Despite the weakness he observed Friday, the trader sounded an optimistic note for this week.

"Technically, we are in a pretty decent situation," he said, adding, "Next week the calendar is nonexistent." In addition, figures last week showed "slightly positive" flows into municipal bond funds, he said.

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