For the week ending June 22, bank MBS passthrough holdings rose $54 billion, partially reversing the prior week's dip.

Analysts from JPMorgan Securities said it would seem that banks took quarter-end gains for June settlement, representing the $64 billion sold in passthroughs the previous week, but bought back securities for the same month. They reported that they have never observed such large swings in monthly bank holdings, adding that the last time something like this happened was in 2003 when banks sold passthoughs and bought back CMOs for quarter end. What sets this transaction apart, however, was that it was much bigger and was done entirely in passthroughs.

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