MBS and Swaps
April 8th, 2009 2:51 pm | by John Jansen |Swaps are pretty much tighter in all the maturity buckets except for the seven year which leaked a tad wider.
Two year spreads were three basis points tighter at 57. Three year spreads were one basis point tighter at 54 3/4. Five year spreads narrowed one basis point at 58 3/4. The aforementioned 7 year spread widened one basis point to 33 basis points. Ten year spreads are one basis point tighter at 21. Thirty year spreads still trade in the ether and are a basis point tighter at NEGATIVE 24 3/4.
Mortgages are marching tighter with the best gains n the lower coupons. FNMA 4 1/2s are 8 ticks tighter to swaps and Fnma 5s are 7 ticks tighter to swaps.
Originators have been sellers as is their custom. However, the Federal Reserve, money managers, hedge funds and Asian investors have overwhelmed the sellers to drive spreads tighter.
One salesman described the market as “en fuego”.
