CMO Market Update

August 13, 2018

Mortgage sector Investors, whether in CMOs or MBS, continue to favor front/short cashflows with WALs between 3-5 years and extension to the 6 to 7 years if rates increase markedly.

Stronger secondary market bids, especially for shorter CMO structures, should continue to facilitate extension trades and other swaps. For those seeking liquidity, our traders are looking for positions with 6+ coupons in $1mm plus size.

Kevin A. Smith, CFA

Manager, Strategic Analytics

Vining-Sparks IBG LP

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