Mortgage-Backed Securities Outperform U.S. Treasurys
May 19, 2011
Traders noted investors showing interest in the mortgage market and added that there is plenty more cash ready to come in if Friday's employment number sparks another slump in the Treasury market. As a result, 30-year pass-through securities were down 1/4 from Wednesday's close, better than the 15/32 decline seen in the comparable 10-year Treasury. One trader said there were ``dribs and drabs'' of buying, mostly in the deeper discounts. Meanwhile, there was no sign of mortgage bankers selling. But he said a couple of investors waiting for the jobs data could be big buyers of 8% and 8.5% securities. A trader at a regional firm said ``reasonably heavy'' buying had already started Thursday after three days of trading with little clear direction. He speculated that the activity may have been triggered by the Treasury market's breaking important levels, yields of 6.375% on the two-year note and 7.125% on the long bond.
VastPress 2011 Vastopolis
