The firm recommends selling 15-year 5.0% passthroughs and buying a duration-weighted quantity of 15-year 4.5% passthroughs. 15-year 5.0% have been a very strong performer in recent weeks, driven by strong demand for CMO collateral and outright buying by depositories. As a result, the firm believes that the coupon is rich relative to 15-year 4.5%. In addition, the 5.0%'s combination of high dollar price and relatively low yield spread to swaps is likely to make CMO issuance more difficult in that coupon, which would remove a key source of demand for 5.0% and likely cause the 5.0% / 4.5% relationship to move back toward fair value.
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The prime jumbo RMBS transaction is collateralized by 402 residential mortgage loans.
7h ago -
Diversity and metropolitan focus could provide resiliency in economic downturns
8h ago -
Federal Reserve Chair Jerome Powell was noncommittal about cutting interest rates at the central bank's next monetary policy meeting in July, saying future actions will depend on incoming data. His comments come as President Trump ramps up his criticism of the Fed chair.
11h ago -
Bill Pulte, regulator and conservator of entities that buy and securitize many mortgages, also reaffirmed he's 'not happy with" lenders' main score provider.
June 30 -
Eagle + West is Brookfield's premier luxury building at Greenpoint Landing.
June 30 -
BofA Securities, Australia and New Zealand Banking Group and Japan's SMBC Bank International are joint lead managers.
June 30