Agency spreads, activity stall; Freddie Mac expected to issue two- or three-year security

By Lisa Kerner

Charlotte, N.C., March 8 - Agency spreads saw little movement for the second day in a row.

One trader described Tuesday's agency spreads as "somnolent," blaming the lack of activity on a back-up in Treasuries.

A second trader said agency spreads may have moved slightly wider but not significantly.

Supply and demand are favorable for spreads, he said.

Callable issuance from the last half of 2010 is not getting called.

The first trader added that callable deals are being printed, and people are looking at spread product callables.

Both traders are waiting for Wednesday Freddie Mac's Reference Notes announcement and agreed that Freddie Mac's funding needs aren't as great as those of Fannie Mae.

While many may hope for an announcement of a five-year issue, the traders are now eyeing either a two-year issue or a three-year issue.

Fannie Mae added $4 billion of new supply in the five-year sector last week.

Freddie Mac failed to issue a Reference Note security on Feb. 24.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.