While flows were seen as choppy, mortgages held up better than expected last week even given all the negatives. Flows were two-way, with active participation from asset managers and fast money taking advantage of dips and profit taking on strength. Originators, meanwhile, were average to slightly average sellers with supply mainly in 5.5s and 5s.

Analysts for the most part were neutral to negative given the potential for an uptick in volume due to several factors, including: the looming Federal Open Market Committee meeting; increased supply on declining paydowns; more ARM to fixed refinancings; limited demand from overseas given current yield levels; expectations of lower bank interest with the potential decline in deposits; increased C&I lending; curve flattening; and lackluster rolls.

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