Agency Update

May 8, 2017

Agency yields continued to improve last week, increasing 4 to 8 bps across the curve.  Two-year Agency yields increased by 4 bps to 1.39%, 5-year Agency yields improved 8 bps to 1.99%, and yields on 10-year Agencies were higher by 8 bps to 2.73%.

Yield spreads for Agency bullets compared to Treasuries were fairly stable last week, but Agency callables tightened 2 to7 bps, depending on the structure and call tenor.

Activity last week was largely focused on the following:

For Agency callables, Freddie remains slightly cheaper in price to the other GSEs. Investors should be able to pick up 2 to 4 bps in Freddie paper, depending on the call structure and tenor.

Michael S. Erhardt, CPA

Senior Vice President

Investment Strategist

Vining Sparks, IBG

The information included herein has been obtained from sources deemed reliable, but it is not in any way guaranteed, and it, together with any opinions expressed, is subject to change at any time. Any and all details offered in this publication are preliminary and are therefore subject to change at any time. This has been prepared for general information purposes only and does not consider the specific investment objectives, financial situation and particular needs of any individual or institution. This information is, by its very nature, incomplete and specifically lacks information critical to making final investment decisions. Investors should seek financial advice as to the appropriateness of investing in any securities or investment strategies mentioned or recommended. The accuracy of the financial projections is dependent on the occurrence of future events which cannot be assured; therefore, the actual results achieved during the projection period may vary from the projections. The firm may have positions, long or short, in any or all securities mentioned. Member FINRA/SIPC.
Copyright © 2021
This is a publication of Vining-Sparks IBG, L.P.
775 Ridge Lake Blvd., Memphis, TN 38120