The week was marked by several volatile trading sessions as Treasury yields surged back to near 5.0% after dipping to 4.68% in the early part of the week. Treasurys sank on better-than-expected economic news last week. The sell-off was further exacerbated by selling from mortgage players in order to shed duration. This entered into the mortgage arena as well with heavy selling of $3-4 billion, primarily in 6s and 6.5s.
Originators, which had been relatively quiet, came back with a vengeance mid-week. Amid all the selling from investors, mortgage bankers added $2-4 billion into the fray, also mostly in 6s and 6.5s.