May 30, 2017
Agency yields increased slightly across the curve during the previous week, with larger changes occurring on shorter maturities. On the week, two-year Agency yields increased 3 bps to 1.38%, 5-year Agency yields increased 1bp to 1.89%, and yields on 10-year Agencies also rose by 1 bp to 2.62%.
Yield spreads for Agency bullets compared to Treasuries were firm, while Agency callables tightened 1 to 6 bps, depending on the structure and call tenor.
Last week investors largely focused on the following:
- Agency bullets with 3 to 5-year finals
- 3YR NC 1YR OTC (pick-up of 7 to 10 bps to bullets)
Finally, Farm Credit issued various floaters, including a 15-year $150mm floating rate bond with a coupon of 1.61% (LIBOR + 56 bps) that was well received by investors.
Michael S. Erhardt, CPA
Senior Vice President
Vining Sparks, IBG