Nothing about the market indicates the looming holidays - not the flow, not even the pricing. By this time in previous years, dealers would have been bringing in a last minute rush of deals that would have pressured spreads. The seasonal tide this year has been no heavier than the aggressive volumes placed throughout the whole of 2006 and December's volume is unlikely to affect spread levels.

Royal Bank of Scotland analysts expected 12.9 billion ($17 billion) of European ABS and MBS deals to price by the end of last week, building off the strength of the 19.3 billion of transactions printed during the U.S. Thanksgiving week and in the run-up to year-end. By Monday, 14.0 billion of deals had issued price guidance with another 15.2 billion more awaiting price guidance. Analysts said that so far, they have seen only limited spread pressure in the face of this supply.

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