Mortgage flows were active last week despite the overhang of a Federal Open Market Committee meeting and non-farm payrolls looming. The week started off with better than expected support from month-end index buying. Also supporting the bid was demand from CMO desks, steady relative value buying as a result of the previous week's cheapening, and some fast money as well. The overall preference was down in coupon, though there was some opportunistic activity up the stack. Originator selling, meanwhile, held to a $1 billion per-day average.

Last week spreads were one basis point wider in 30-year FNMA 4.5s through 5.5s, and four to five basis points wider in 6s and 6.5s. In 15s, lower coupons were flat to slightly tighter, while 5s and 5.5s were one and three basis points weaker, respectively.

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