Agency Update

August 20, 2018

Geopolitical events around the globe led to increased equity and commodity market volatility over the past week but, despite the heightened volatility, Treasury yields ended the week essentially unchanged from the previous Friday.  Agency bullet yields moved in line with Treasuries.  Three- and five-year bullet yields were unchanged at 2.75% and 2.82%, respectively.  Ten-year bullets richened by one basis point to 3.21%.


Yield spreads for Agency bullets versus Treasuries were unchanged last week and basically have not changed over the past month.  After widening over the past several weeks, spreads on callable Agencies tightened by one basis point across the curve.  Less-structured three-year callable Agencies are trading at 2.99%, and short lockout five-year callable paper is trading at 3.30%.  Callable yields across the curve have pulled back several basis points from their recent highs but remain near the highest levels in years.

The following table reflects last week’s total issuance and call activity across GSE issuers:

Fannie Mae passed on its issuance slot for Benchmark securities last Tuesday, August 14th.  That was the 10th date it has passed on this year out of 13 issuance dates.  Freddie Mac will announce plans to issue Reference notes on this Monday August 20th.  Next Wednesday August 29th marks the next announcement date for the Federal Home Loan Bank to issue Global securities.


Daniel Anderson

Senior Vice President

Vining Sparks

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