CMO Market Update

June 17, 2019

CMO spreads to Treasurys widened again last week, extending recent highs for 3-, 5-, and 10-year Agency PACs and Sequentials. While CMO yields are at or near lows this year, they have held up well in relation to Treasurys, especially in May and June. Treasurys yields have dropped approximately 30-40bps during that span.

If you missed last week’s commentary:

In the past, we have mentioned that customers may want to consider “cut-down” coupons when investing in CMOs. This was reiterated in the June MBS Prepayment Commentary:

Travis Nauert, CFA

Analyst, Investment Strategies

Vining Sparks IBG, LP

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