As year-end approaches, a seasonal slowdown in both supply and demand is leaving the mortgage-backed securities market fairly quiet. Spreads have widened a bit over the week, while technicals are expected to perform strong.

Spreads among 10-year Fannie Maes have widened to 144 basis points over the 10-year Treasury from last week's close of 141 over. However, over the 10-year swaps and 10-year benchmark agencies, the spreads have tightened slightly to their three-month average. "They're pretty much at the average relationship, so the mortgage market as a whole seems fairly valued," said Art Frank, director of MBS research at Nomura Securities.

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