Credit Suisse First Boston analysts reported that foreign MBS purchases remained robust in June, helping purchases reach an estimated $66 billion for the second quarter, versus roughly $48 billion in the first quarter. Foreign investors, according to CSFB, still bought MBS at a strong, $24 billion, pace in June, down marginally from an estimated $30 billion in May. These figures signal a positive outlook for continued purchases, said analysts, while also noting the correlation between these purchases and U.S. current account deficit balances, which are expected to remain high.
Agency debt redemptions remained strong, analysts added. Net redemption volumes were still high for Fannie Mae at $21 billion in June and $27 billion in May. By contrast, Freddie Mac had positive net issuance of $4.3 billion and $8.7 billion, respectively.