Agency spreads remain relatively unchanged on month-end, quarter-end slow down

By Lisa Kerner

Charlotte, N.C., Sept. 28 - Agency spreads remained relatively unchanged overall on Wednesday, according to Mary Ann Hurley, vice president of fixed-income for D.A. Davidson & Co.

More specifically, the five-year and out sector was unchanged to tighter by 2 basis points and the three-year and shorter bucket was unchanged to wider by 0.5 bp, another trader said.

All in all, Wednesday was quiet, he said, attributing some of the inactivity to the month end, quarter end and the start of the Jewish holiday, Rosh Hashana.

The trader said a lot of selling is going on in an effort to make balance sheets look larger. People are "window dressing their books for Sept. 30."

The five-year Treasury was well bid for at auction on Wednesday, said Hurley.

An auction for a seven-year Treasury will be held on Thursday. Even though it is being held on "a funny part of the curve," Hurley said she expects that auction to go well due to the weak economy and because it fits with the Fed's so-called Operation Twist selling range of six to 30 years.

Hurley said the back up in yield made a lot of paper look a lot more attractive than a week ago, one positive on the day.

Overhang from the situation in Europe continues to be a major concern.

"European nations are still waiting for a review on Greece's deficit reduction," said Hurley. The reduction is not close to being what is required, she said, and the European nations have yet to come up with a plan, such as a special funding vehicle, to solve their financial crisis.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.