Deutsche Bank Securities analysts favor being long the basis currently given the Federal Reserve's support of the MBS market. 

The Fed's strong buying in 30-year 5s and 5.5s in the second half of this year has resulted in extremely tight levels in these coupon, analysts noted, while the wings — 4.5s and 6s — have lagged in large part to "lack of consistent sponsorship." They believe this trend will continue, and so they suggested being long the superfly (long 5s, long 5.5s, short 4.5s and short 6s).

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