Last week the influence of volatility on mortgages was very evident. Specifically, volatility ticked much higher on Monday's and Wednesday's trading sessions on a flight to quality bid brought on by weaker global equities, commodities and economic concerns. Spreads on mortgages were considerably wider on these days as well. Absent the safe haven bid on Tuesday's and into Thursday's session, mortgage spreads held slightly firm.

Outside of volatility, flows were modest and two-way. There was buying taking place with broad participation, although with the exception of overseas investors. Buying occurred both up and down the coupon stack and was not all influenced by changes in the curve's shape. Originator selling continues to average about $1 billion per day.

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