Bond Market: Agency Spreads
April 7th, 2009 2:53 pm | by John Jansen |Agency spreads are unchanged in the 2 year sector and 1 basis point to 2 basis point tighter across the rest of the curve. The 2 year sector lagged a touch because FNMA announced a 2 year offering which will price tomorrow.
The original price talk was low 60s. The deal is blowing out and the talk in now just 60. The issue is about 5 basis points cheap to neighboring issues.
Unofficially, I hear that the deal will total $ 6 billion bonds.
Dealers are busy speculating (both literally and figuratively) about the next agency buyback and which sector will be targeted. The consensus favors the 1year through 2 year sector. The Federal Reserve has ignored that sector the last five times they intervened. It is also likely that quite a bit of paper came into the market on swap versus the aforementioned 2 year FNMA deal so steet inventory should be an off the run cornucopia in that sector.
One Response to “Bond Market: Agency Spreads”
By Brian on Apr 7, 2009 | Reply
John,
For a snapshot on the corporate side the CAG deal that was priced at +400 yesterday is currently bid about 20 tight with about a 10 bps spread. Also, the recent Dell deal has maintained a firm tone, about 20 tight to yesterday and a tad over 70 from its issuance.