April 30th, 2009 10:46 am | by John Jansen |

I did not have MBS spreads earlier. One trader reports that mortgages are 2 1/2 basis points wider to the 5 year Treasury. Swaps are 1basis point to 2 basis points tighter.

MBS have a heavy tone about them as several days of heavy origination selling weighs on sentiment.

The same trader notes that the Federal Reserve is generally a buyer on weakness and banks are in constant accumulation mode. He expects that MBS will outperform in a downdraft and hold their own in a rally.

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