ARM Update

March 26, 2018

Yield spreads between new-issue hybrid ARMs and Treasuries were unchanged last week, as the broader bond market moved up in price, sending yields slightly lower across the curve.  ARMs outperformed their fixed-rate MBS counterparts, with yield spreads widening on this product approximately 2 to 4 basis points for the week.  The recent outperformance has undoubtedly been supported by the lack of supply in the ARMs space.  Supply could rebound in April and May, based upon the activity in the current origination cycle.


Last week, activity was primarily focused on the following:



Metrics for some commonly traded structures are below:







Michael S. Erhardt, CPA

Senior Vice President

Investment Strategist

Vining Sparks, IBG

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