By Isobel Kennedy
NEW YORK, (MNI) – The New York Federal Reserve bought $15.7 billion Agency
mortgage-backed securities in the week ended October 24 under its combined QE3
and monthly prepayment reinvestment programs.
The mortgage originators continue to sell 30-year “to-be-announced” or TBA
paper into the market and that is what the Fed continues to buy.
In the latest week, the Fed bought over $9 billion of Fannie Maes, Freddie
Macs and Ginnie Maes with 3% coupons fore delivery in November and December.
For complete details of the Fed’s buying this week, please go to
http://www.newyorkfed.org/markets/ambs/
In other news Thursday, the mortgage market held in very well given the
size of the selloff in the Treasury market. The 10-year note hit a high yield of
almost 1.86% in overseas trading on Thursday. Some dip buying brought it back to
1.79% in New York hours but it could not hold and it has settled in around
1.83%.
Some foreign and domestic accounts used the dip to buy agency MBS, but the
volume was not considered heavy.
Market sources reported some scaling into the market by domestic money
managers. But the dealers were also said to be lightening up some long
positions, too.
Asian accounts have been scattered at best in both the MBS and Treasury
markets.
In fact, large paying by Japanese accounts in intermediate swaps was blamed
for part of Thursday’s Treasury selloff.
Still, some dealers have reported buying of MBS by Asian accounts for the
last few days but the volume was not heavy and not all shops saw the trade. The
Asian buying in MBS Thursday was said to be at the lows as well.
** MNI New York Newsroom: 212-669-6430 **
–email: ikennedy@mni-news.com
[TOPICS: MMUFE$,M$U$$$]
