Mortgage spreads were little changed over the past week. The sector continued to be supported by balanced flows, even as originator supply increased, and it benefited from month-end extension buying, as well as a near-term favorable outlook.

According to Greenwich Capital Markets, the May Refunding tends to be a strong period for spreads in general and mortgages in particular. Also, they note that volatility tends to decline after the non-farm payrolls report, and further support is expected from conventional settlement notification that begins on Thursday.

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