CMO Market Update

April 6, 2020

Agency CMO spreads to Treasury yields tightened last week to close out March. Overall, spreads were wider for the month and remain wider for the year, but shed some of that relative value in recent weeks. Investors have been seeking lower-coupon bonds, 1.5% – 2.0%, off of 30-year, mid-level coupon collateral. After widening out in recent weeks, floating-rate spreads tightened as well.

Shifting gears, here are a couple things to have on your radar for the days and weeks ahead.

Below is a condensed view of the Treasury Yield and Spread Snapshot from the Overall Commentary, with CMOs alongside for reference.

Travis Nauert, CFA

Analyst, Investment Strategies

Vining Sparks IBG, LP

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