Agency spreads end day, week 0.5 bp to 1.5 bps tighter; Greek debt crisis solution rumored

By Lisa Kerner

Charlotte, N.C., June 17 - Agency spreads closed Friday tighter by 0.5 basis point to 1.5 bps after tracking swap spreads for the day, said a trader.

Stocks rallied on news that a possible solution could be on the horizon for the looming Greek debt crisis - a solution that would not trigger a credit default. The rally brought swaps in, tightening agencies.

The last couple of days were busy, according to the trader, with some attractive one-year and 13-month callable coupons printed and front-end euros selling off considerably.

Since Wednesday, about $4.5 billion of agency debt was printed and placed in the one-year and 13-month space, the trader said.

Callables with longer durations were also printed and met with good demand, which is counterintuitive to falling Treasuries, he noted.

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