CMO Market Update

October 1, 2018

This week we will focus on the September Trade Summary where we look at what our Customers invested in last month. New for this month, I’ve added more history to provide perspective. At 96% of purchases, fixed-rate CMOs dominated investor attention. Outright yield levels look compelling to many investors and isn’t surprising if we consider a 5yr Treasury a decent proxy, its yield was up 20bps over September from 2.74 to 2.94. Investors in September were able to pick up nearly 22bps of yield given a similar risk profile as August. Short front sequentials continue their run of popularity and VADMs fell back in line with July’s activity. It will be interesting to keep an eye on this next month as VADMs are still comparatively attractive. Lastly, we hosted two webinars last week so please see information on them down below.

Note: Accessing the Webinar Archive below requires a login. We’ve made every effort to make it as convenient as possible and you can register here. The login is free and comes with zero obligations. If you have any issues, email me at and I’ll personally guide your registration through.

Educational Opportunities:

We recently hosted two webinars focusing on Mortgage Markets and CMOs in particular along with an update on the Single Security Initiative. With a login (mentioned above), you can view them in our Webinar Archive.

Kevin A. Smith, CFA

Manager, Strategic Analytics

Vining-Sparks IBG LP

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