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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: shades who wrote (60052)	5/1/2006 4:53:59 PM
From: shades	Read Replies (1) \| Respond to of 110194

US Agencies: Risk Premiums Widen As Treasurys Fall . NEW YORK (Dow Jones)--Risk premiums on actively-traded agencies widened slightly Monday amid a sell-off in the U.S. Treasurys market. "As Treasuries sold off, swap spreads widened out 0.5 basis points, and agencies kept pace," said K.N. Sundararajan, an agency strategist at Barclays Capital in New York. Treasurys prices fell sharply after stronger-than-expected separate reports on personal income and consumer spending, and national manufacturing activity. Strong economic indicators throw into question whether the Federal Reserve will pause its monetary tightening campaign anytime soon. Federal Reserve Chairman Ben Bernanke said last week that the central bank could stop raising rates to see how its policy is affecting the economy. This wouldn't preclude additional rate hikes later, however, the Chairman said. Treasurys were hit by a second bout of selling in late trade Monday after CNBC anchor Maria Bartiromo said Bernanke told her over the weekend that his remarks were misinterpreted. Bartiromo said Bernanke was not seeking to send a dovish message but was "trying to basically create some flexibility for the Federal Reserve, saying the Fed may pause but the data will really dictate whether more rate hikes will occur at future meetings." Other than tracking movements in other fixed income markets, the agency market was otherwise fairly quiet, largely because of a holiday in Europe and Japan's "Golden Week" holiday. The absent Japanese and European investors sapped market activity, but didn't have much impact on spreads, said Jim Vogel, executive vice president at FTN Financial Capital Markets. Elsewhere, Freddie Mac announced late in trading that it bought back $7.1 billion of securities with expired European, or one-time, call options. The housing agency had offered in late April to buy up to $26.3 billion, but the size of the buyback met analysts' expectations. As for Tuesday, Vogel said he expects to see the Federal Home Loan Bank's Office of Finance price its $3 billion 10-year global bond -- its first large 10-year offering in two years. Freddie Mac Reference Notes Coupon Maturity Price Over Tsy Change (basis points) (basis points) 5.125% April 2008 25.8 +0.80 5.125% April 2011 33.5 +0.90 5.250% April 2016 34.8 +0.30 Fannie Mae Benchmark Notes Coupon Maturity Price Over Tsy Change (basis points) (basis points) 4.625% January 2008 24.0 +0.70 5.125% April 2011 33.5 +0.90 5.000% March 2016 34.8 +0.30 Quotes from 4:07 p.m. EDT Source: TradeWeb -By Neil Shah, Dow Jones Newswires; 201-938-2189; neil.shah@dowjones.com (END) Dow Jones Newswires May 01, 2006 16:19 ET (20:19 GMT) Copyright (c) 2006 Dow Jones & Company, Inc.- - 04 19 PM EDT 05-01-06