Agency spreads open wider on day that starts busy, ends slow; Freddie Mac announcement ahead

By Lisa Kerner

Charlotte, N.C., March 7 - Agency spreads opened Monday about ½ basis point wider and remained unchanged for the better part of the day, according to one trader.

Monday was a slow day overall, and buying was better in the morning, the trader said.

There was not a lot of issuance in callables, and no larger deals were printed.

Freddie Mac will announce an issue on Wednesday. It could be a two- or three-year deal or possibly a five-year issue to compete with the recent Fannie Mae issue.

A five-year issue is on the wish list, the trader said.

A second trader also noted the lack of activity on Monday. He blamed a rally on Friday for taking buyers out of the market.

"Longer paper outperformed Treasuries on the day," he said, calling agency spreads on Monday "mixed."

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