Agency Update

April 10, 2017

Agency yields were mixed on the week with modest increases on shorter-term maturities and small declines for longer-term maturities.  Two-year Agency yields increased by 4 bps to 1.39%, 5-year Agency yields held firm at 2.04%, and yields on 10-year Agencies were lower by 2 bps to 2.78%. 

Yield spreads for Agency bullets compared to Treasuries were largely steady.  Yield spreads for Agency callables widened 1 to 6 bps, depending on the structure and call tenor.  For investors that can handle the optionality, callables are attractive on a spread basis, as yield spreads have improved over the recent lows reached in mid-March (see graph below).













Michael S. Erhardt, CPA

Senior Vice President

Investment Strategist

Vining Sparks, IBG

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