Wednesday, December 27, 2017
MANAGING DIRECTOR: Scott Carrithers   PORTFOLIO SALES AND SERVICE: Steve Panknin • George Morris • Jeff Goble • Chris Thompson • Sean Doherty Robert Brickson • Kevin Doyle • Lonnie Harris •  Mark Tranckino • Robert Schuyler  Tom Toburen • Josh Kiefer • Nicole Burczyk • Kelley Frye • Natalie Regan • Aaron Stoffer • Chuck Honeywell

US Treasury Market
Date	1 mo	3 mo	6 mo	1 yr	2 yr	3 yr	5 yr	7 yr	10 yr	20 yr	30 yr
12/18/17	1.26	1.38	1.51	1.70	1.84	1.94	2.17	2.30	2.39	2.57	2.74
12/19/17	1.25	1.37	1.51	1.71	1.87	1.97	2.23	2.37	2.46	2.66	2.82
12/20/17	1.22	1.38	1.51	1.72	1.87	1.98	2.24	2.40	2.49	2.71	2.88
12/21/17	1.21	1.35	1.54	1.73	1.89	2.01	2.26	2.39	2.48	2.68	2.84
12/22/17	1.15	1.33	1.54	1.73	1.91	2.01	2.26	2.40	2.48	2.68	2.83
12/26/17	1.24	1.47	1.52	1.75	1.92	2.02	2.25	2.38	2.47	2.66	2.82

                                                                                       Source: U.S. Department of the Treasury, as of 12/26/17  

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Year-end Liquidity and Opportunities

As expected being year end between holidays trading volume so far this week is very light.  US treasuries are mixed this morning with the front end cheaper by a bp while the long end outperforms richening 2bps, but all on thin trading. Agency trading volume is less than 99% of the trading days since 2010, and muni trading volume is the lowest in a month.  The thing to remember is that market volatility on the back of lower liquidity can at times create opportunities, especially at year-end when some investors are forced to trade due to non-market related events like balancing their books, taking advantage of tax reform, etc.

We have seen some trading on the desk, a seasoned FNMA 15yr 2% with a WAM of 116 months (3.9 years avg life) that yields 23bps more than the US treasury curve.  Prepayment speeds have been fairly steady and offered at a good discount.  At 98-21+, this bond presents good value if you need exposure on the shorter side of the belly.

Keep an eye out for opportunities like these as the market may not be completely in sync with the pressures of year-end clean up.                                        

This information is intended for institutional investors only. The material provided in this document/presentation is for informational purposes only and is intended solely for private use. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instruments.

•Not FDIC Insured •No Bank Guarantee •May Lose Value