Recommends FNMA 5s and especially Dwarf 4.5s over 5s/10s agency debentures. FNMA 5s benefit from the special roll (about 5/32s a month better than funding) and the potential for a decline in volatility after the recent spike. While the front month OAS on FNMA 5s are at tight level, they have little meaning, in the firm's view, as the two month rolls are through fail. When/if FNMA 5s appear rich two months forward, then analysts will take their basis trade off. Being short the basis in this environment may be very costly, as the basis resets cheaper for July. There are simply not enough 30-year 5s to go around
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Spreads ranging from 16-18 basis points over the three-month, interpolated yield curve on the P1 (Moody's) and F1+ (Fitch) notes, to 160 to 170 over the benchmark on the class D notes.
7h ago -
Mortgage rates rose 7 basis points this week, Freddie Mac said, and more increases are likely following a weaker than expected gross domestic product report.
8h ago -
Broken down by product type, the agency's NJCLASS Standard Fixed product should account for a large majority of the loans, 75.4%. NJCLASS Consolidation will account for the next-largest group, 14.1%.
April 24 -
Congressional Review Act resolutions are ramping up ahead of the 2024 election cycle. Experts say that, although none are likely to become law, the resolutions are still powerful messaging and political tools.
April 24 -
The notes will price against Treasurys, with spreads expected to fall between 85 and 90 basis points over the benchmark.
April 24 -
The JPMorgan Chase CEO took aim Tuesday at the proposed Basel III endgame rules, hindrances to mergers and bureaucratic burdens. "I would love to have a more productive relationship with regulators, but I think it takes conversation," Dimon said.
April 24