US Treasury rates traded in a narrow range overnight as the market digested updated economic data out of China. While the overall pace of industrial output slowed, both 1Q2023 GDP estimates and retail sales beat analysts’ expectations. Back in the US, the focus has shifted towards the liquidation process for both the Silicon Valley and Signature Bank securities portfolios. The combined entity holds approximately $113bln current face concentrated in conventional MBS pass-throughs (46.2%), Agency CMO’s (16.5%), and Agency CMBS (12.7%). Sales will be made on a “gradual and orderly basis” to reduce the market impact. Subject to trading conditions, the FDIC will target approximately $1.5bln to $2bln per week with MBS first on the chopping block.
Chris Eckhoff
Director, Investment Management Group
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