Agency spreads unmoved; end of month, quarter spurs some activity; consumers not hopeful

By Lisa Kerner

Charlotte, N.C., Sept. 28 - Agency spreads remained generally unchanged at the end of the day on Tuesday, said Michael Skinner, an agency trader with Wall Street Access.

With trading activity related to the end of the month and the quarter, spreads should remain firm through the week.

Skinner said he noticed the some accounts trying to balance up as September and the quarter wind down.

Interest in callables picked up on Tuesday, and Skinner believes the market will be robust for the next couple of days.

Looking ahead to next week, Skinner said he expects the Oct. 5 Fannie Mae Benchmark Note to be in the front end, probably a two- to three-year offering.

Also on Tuesday, the Conference Board released its Consumer Confidence Index for September.

The index now stands at 48.5, down from a revised 53.2 in August.

The Present Situation Index decreased to 23.1 from 24.9, and The Expectations Index declined to 65.4 from 72.0 last month, according to a Conference Board news release.

Lynn Franco, director of the Conference Board Consumer Research Center, said the pull-back in confidence was due to less favorable business and labor market conditions.

"Overall, consumers' confidence in the state of the economy remains quite grim," Franco said.

"And, with so few expecting conditions to improve in the near term, the pace of economic growth is not likely to pick up in the coming months," Franco said in a news release.

The survey is based on a representative sample of 5,000 U.S. households.

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