The recent easing of the squeeze in 30-year FNMA and Gold 5s has removed some of the pricing and liquidity concerns in the market.

"What is easing the squeeze in 5s is that there has been significant new origination in the coupon, helped by slightly stronger refinancing activity and healthy seasonal factors," said Paul Jacob, a mortgage strategist at Countrywide Securities. He explained that originators have reacted to the coupon run-up by pooling most of the new production as 5s.

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