Investor appetite for non-agency MBS remained high in the first quarter of 2012 despite the recent uptick in new trading, but this has not done much to push prices above fair value, according to analysts. Through the first quarter of 2012, trading in non-agency MBS has been strong as the average volume in non-agency investment-grade paper more than doubled in January to $1.4 billion, said analysts at Bank of America/Merrill Lynch citing TRACE (Trade Reporting and Compliance Engine) data. TRACE facilitates the mandatory reporting of over-the-counter secondary market transactions in eligible fixed-income...