The European ABS market has finally shifted into summer mode, as the new-issue pipeline last week appeared to have finally reached the customary slowdown. Pricing on the primary and secondary fronts was almost at a standstill. However, it was business as usual in the run-up to August - year-to-date issuance volumes have peaked at 145 billion (US$177.44 billion).

Market reports indicated that more than 3 billion (US$3.67 billion) priced over the first week of August. An upswing in CMBS paper occurred, both from U.K. names as well as the continent, with spread improvement on secondary trading levels. The Morpheus deal, launched under the EloC program earlier in the month, saw its four-year sterling-denominated triple-A tranche trading at 23 basis points over three-month Libor and offering a 20 basis point pickup over RMBS in the single-A level, JP Morgan Securities said.

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