Agency spreads tighten 2 to 4 bps; Fannie Mae expected to add to supply

By Lisa Kerner

Charlotte, N.C., June 24 - Agency spreads tightened 2 to 4 basis points on Wednesday, with the short end tighter by 4 bps, in line with swap spreads, a trader said.

The 10-year sector moved in 2 to 3 bps, according to the trader.

The Federal Open Market Committee's statement Wednesday appeared to indicate that it will continue down the path of buying agencies, said the trader, which may have led to the spread tightening.

On the other hand, supply should get a boost this week when Fannie Mae announces a two- or three-year issue on Thursday, the trader said.

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