Friday's employment report offered the bond markets no solace, and fears rose exponentially with the continued erosion in prices, traders said.

Non-farm jobs increased 177,000 in October led by gains in the service sector, while manufacturing employment stabilized. The report was in line with the market's most sober expectations and so, with no white knight in sight, sellers again held the reins, driving tax-exempt prices down. Traders said buyers appeared late in the day, but prices were still quoted down 1/4 to 1/2 point.

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