Friday, August 11, 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 • Larry Russell •  Mark Tranckino • Robert Schuyler  Tom Toburen • Josh Kiefer • Nicole Burczyk • Kelley Frye • Natalie Regan • Aaron Stoffer

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
8/4/17	1.00	1.08	1.14	1.23	1.36	1.51	1.82	2.08	2.27	2.61	2.84
8/7/17	.99	1.02	1.14	1.22	1.36	1.52	1.81	2.07	2.26	2.60	2.84
8/8/17	1.00	1.06	1.16	1.24	1.36	1.53	1.84	2.10	2.29	2.63	2.86
8/9/17	1.01	1.06	1.15	1.21	1.33	1.50	1.81	2.06	2.24	2.59	2.82
8/10/17	1.02	1.05	1.14	1.22	1.33	1.49	1.78	2.03	2.20	2.55	2.79

              Source: U.S. Department of the Treasury, as of 8/10/17

U.S. Agency Trader’s Perspective

As loan-to-deposit ratios continue tightening for a majority of our customers, we continue to seek options to opportunistically raise liquidity for our customers.  We currently believe US Agency (USAG) bullets represent a strong relative proposition to sell at this time.

 

According to the Bloomberg Fair Value USAG Index, shown above, 5yr and 7yr bullet spreads remain near trailing 1yr lows.  Coupled with declining overall US Treasury (UST) rates (5yr ~23bps tighter / 7yr ~16bps tighter since start of 2017) clients should be able to realize a gain and raise liquidity, if warranted, for bullets bought in early 2017.  We particularly like selling 3-5yr USAG bullets and swapping into 6yr UST portion of the curve.  The 6yr portion of the UST curve should provide strong roll returns as the curve remains steep, increased liquidity (tighter bid-ask spread for UST vs USAG), while only giving up a minimal amount of spread (compared to USAG bullets).  If you are looking to raise cash or take opportunistic gains, you might want to look at your USAG bullets holdings.  Please contact your Capital Markets Group representative to assist in evaluating options that work for your portfolio.

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