CMBS spreads have been softer of late, due to a combination of swap spread compression and a general concession for upcoming supply. The calendar is flush with over $13 billion of pending supply, suggesting that some may be taken down or postponed until next year, especially if spreads continue losing ground.

There has been increased competition as well of late from the corporate sector. Bid list activity has been ample enough, along with profit taking and a lack of dealer support, suggesting at least some of those funds are earmarked for the $10 to $15 billion in corporate supply expected over the week. Triple-A 10-year CMBS spreads were 4 basis points wider at over 50 basis points to swaps, and lower credits saw at least twice the amount of widening.

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