Agency Update

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:

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

Investment Strategist

Vining Sparks, IBG

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