FRM Update

May 20, 2019



MBS

Yield spreads on current production MBS to Treasurys were relatively stable last week, with 15-year widening 1 bp to 51 bps, while 30-year held firm at 76 bps.  The global flight to safety continued to push yields downward last week.  The 5-year Treasury has now declined over 90 bps since early November 2018, as valuations have improved significantly.

Investors were very active last week and took advantage of the improved pricing to dispose of underperforming positions and odd-lots.  Reinvestments were largely focused in the 20-year sector in 2.5s to 4.0s. There was also solid buying activity in 15-year 3.0s and 3.5s with investors shying away from higher coupons likely because of the associated premiums.



Mortgage Rates and Refinance Activity

Benchmark mortgage rates declined last week. 15-year mortgage rates decreased 6 bps to 3.41%, while 30-year mortgage rates fell 3 bps to 4.02%, just above its lowest level since early 2018 (3.87%).





Michael S. Erhardt, CPA

Senior Vice President, Investment Strategies

Vining Sparks IBG, LP

INTENDED FOR INSTITUTIONAL INVESTORS ONLY.
The information included herein has been obtained from sources deemed reliable, but it is not in any way guaranteed, and it, together with any opinions expressed, is subject to change at any time. Any and all details offered in this publication are preliminary and are therefore subject to change at any time. This has been prepared for general information purposes only and does not consider the specific investment objectives, financial situation and particular needs of any individual or institution. This information is, by its very nature, incomplete and specifically lacks information critical to making final investment decisions. Investors should seek financial advice as to the appropriateness of investing in any securities or investment strategies mentioned or recommended. The accuracy of the financial projections is dependent on the occurrence of future events which cannot be assured; therefore, the actual results achieved during the projection period may vary from the projections. The firm may have positions, long or short, in any or all securities mentioned. Member FINRA/SIPC.
Copyright © 2021
Member FINRA/SIPC
This is a publication of Vining-Sparks IBG, L.P.
775 Ridge Lake Blvd., Memphis, TN 38120