CMO Market Update

January 22, 2019

We continue to see good activity centered in the 5yr space. While this tends to be a “sweet spot”, duration and cashflow wise, for many of our investors, it also looks relatively good on a spread basis. As mentioned below, while Treasury yields are down ~40bps from their recent highs, 5yr Sequential and PAC CMO spreads have widened about 10bps. This has blunted the impact of Treasury yield declines.


CMO Spreads & Yields Measured on a Weekly Basis


Kevin A. Smith, CFA

Director Investment Product Strategies

Vining Sparks IBG, LP

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