CMO Market Update

August 6, 2018



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.

The average fixed-rate CMO Vining Sparks traded in July yielded 3.18% and had a WAL of 3.9.

The average floating-rate CMO Vining Sparks traded in July yielded 2.40% and had a WAL of 6.5.

Stronger secondary market bids, especially for shorter CMO structures, should continue to facilitate extension trades and other swaps.






Kevin A. Smith, CFA

Manager, Strategic Analytics

Vining-Sparks IBG LP

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