Sector Update

February 7, 2022



A few points to start your week


Individual Sector Updates – Click to Access

Agency Market | Agency MBS | Agency ARM | Agency CMO | Municipal Market | SBA Market | Interest Rate Products



Today – Yields relatively unchanged, curve slightly steeper, equities mixed


Municipal yields struggled with late week Treasury selloff, spreads still relatively wide – look for volatility and opportunities



Broad Index returns have suffered as yields have increased and spreads widened


Equities off to a tough, and volatile, start to the year


Upcoming Webinars – (1 hour CPE available, registration opens 2 weeks prior to each webinar)

1/11: 1st Quarter Economic Outlook Webinar (slides | webinar replay)

2/22 Bank: Positioning the Investment Portfolio for Performance

2/24 Credit Union: Positioning the Investment Portfolio for Performance

3/8 Bank: Balance Sheet Strategies in an Expected Tightening Cycle

3/10 Credit Union: Balance Sheet Strategies in an Expected Tightening Cycle


Treasury yields soar pushing yields above/towards pre-pandemic highs



Yield on 10- and 5-year maturities surpass pre-pandemic levels


Yield on 3- and 2-year maturities still lag pre-pandemic levels, continue to rise


Curve Shape – 2s5s moves flatter, 7 bps flatter YTD


Curve Shape – 2s10s moves flatter, 18 bps flatter YTD


January MBS prepay speeds released – show broad declines




What We’re Reading


Market Today | Daily

Weekly Recap | Weekly, Friday

Monthly Review (January) | Monthly, 1st business day

Brokered Deposit Rate Indications | Weekly, Monday

Investment Alternatives Matrix | Weekly, Tuesday

MBS Prepay Commentary (January) | Monthly, 5th business day

SBA Prepay Commentary (January) | Monthly, 10th business day


WSJ: Elevated Bond Yields Approach Key Milestone
“With the release of one report on Friday morning, the U.S. economy looked much stronger to investors than it did minutes earlier, not only increasing the chances that the Federal Reserve could raise interest rates at a rapid clip this year but making it likelier that the economy could withstand such a move.”


Vining Sparks: Loan Trading: Consumer Lending

It is important to stay abreast of market changes in rates and potential credit concerns that may be creeping in that could impact production and performance. We welcome the opportunity to assist you in evaluating your portfolio for areas of opportunity or provide additional color on this dynamic market.


Vining Sparks Interest Rate Products: Margin Compression: Causes and Solutions

In this article, we examine why the industry is facing margin compression, challenge some of the more prevalent assumptions about banks’ risks profiles and highlight our best ideas for dealing with the current environment.


Vining Sparks: Coronavirus Chartbook and Coronavirus State Charts


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