Buyers were more reluctant last week to add to their positions given the very rich levels. The early part of the week saw some support from banks, as the market held within a narrow range and supply was nil. As the market rallied mid-week, however, profit taking picked up.

Over the Wednesday-to-Wednesday period, spreads on 30-year Fannie Mae 5s and 5.5s were flat to one basis point tighter. Also, 6s and 6.5s were one to two basis points wider. Dwarfs were flat to two basis points tighter.

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