Better selling continued to plague mortgages last week as the market continued to sell off on stronger-than-expected economic data. The 10-year Treasury yield has backed up 17 basis points in the past two weeks to 4.788% as of the close of Jan. 17. Yield levels are at their highest since late October 2006, but still well off their high of last year of 5.245% in late June.
Two-way flows were focused in 5.5% and 6.0% coupons with better selling from real and fast money, while servicers were better buyers. Asian investors have been a disappointment so far this year with very limited participation. When they have added, buying has been in the fuller coupons as well. Talk is that their bogey levels are set at around 4.80% on the 10-year.