The mortgage market was a relatively quiet last week as participants were mainly on hold for the Federal Open Market Committee's midafternoon statement last Wednesday. The announcement failed to stimulate much reaction, and so the market's focus turned to Thursday's 10-year auction and trying to figure out when - and if - Asia would ever show up.

Monday and Tuesday saw roll-related trading as pool notification began Tuesday for 30-year conventionals. Focus was on FNMA 6s, which saw its roll strengthen. Also benefiting 6s was anticipation that Asia will focus on that coupon - when these investors return. In early trading on Thursday, spreads were a basis point or more wider as the market set up for the 10-year auction. Buying interest was starting to pick up but heavy dealer inventories and some originator selling weighed down the sector. Buying was up-in-coupon as the curve steepened.

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