The March pipeline is rolling out largely as expected, which accounts for the steady spread environment. The pace of a deal-a-week is likely to continue straight through the end of April, allowing if anything some tightening across the credit spectrum.

Triple-As are maintaining mid to high plus 40 basis points to swaps in the 10-year tenor, but with the prospect of light supply, demand for high-grade credit, and the diversification offered by this product, spreads look to tighten further, says Merrill Lynch's Roger Lehman. With similar views on the sector, in addition to the sell-off in Treasuries, Salomon Smith Barney is moving their bias on the sector to a modest overweight from neutral.

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