Securitized Products Weekly

J.P. Morgan's North America Securitized Products Weekly covers MBS, RMBS credit, ABS, CMBS, CLO and International ABS. In MBS, the rates reversal caused spreads to tighten from their recent highs, with current coupon duration buying needs across MSR and IIO hedgers significantly lower than at March-end. The hiking cycle as priced by the market would only cap out a relatively small portion of the floater market, leaving 6.5 and higher caps untouched, and would make early buyouts less economical; together with the updated FHA waterfall reducing ET redefaults, near-term ET cashflows should be more stable and less rate sensitive. In RMBS credit, Wednesday's rate hike put extension risk back in the spotlight, especially in non-QM;