The firm recommends selling 30-year 5.5s and buying a duration-weighted amount of 5.0s. The rally in bonds has quickly pushed 30-year 5.5s to a point where prepayments are expected to rise substantially in the months ahead; this will serve to limit further price upside on 5.5s. 5.0s should also benefit from a flatter yield curve, as investors typically react to curve flattening by buying the lowest available 30-year coupon. In addition, we expect 5.0s to benefit from enhanced liquidity, as issuance and CMO activity in the coupon increase over time, laying the foundation for persistent specials in the TBA roll market.
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The prime jumbo RMBS transaction is collateralized by 402 residential mortgage loans.
8h 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.
July 1 -
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