Agency spreads widen after a hectic midweek plus month-end, quarter-end

By Lisa Kerner

Charlotte, N.C., April 1 - Agency spreads ended Thursday a touch wider across the curve by about 1 to 1½ basis points, said Michael Skinner, an agency trader with Wall Street Access.

He said he believes volume ran at about 30% that of a hectic Wednesday.

Skinner has concerns about the longer end of the curve due to a lack of supply in the 10-year area over the course of the year.

"The Fed was always the buyer of last resort, and we no longer have that," said Skinner, who expects to see some widening in the long end as a result.

Next week's new supply from Federal Home Loan Banks will most likely be a two- or three-year offering, according to Skinner. He is predicting a "decent demand" for the offer.

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