Data provider Markit Group has launched the first independent, daily consensus spread service for credit default swaps referencing asset-backed securities (ABCDS).

Markit sources say the service was created partly due to a lack of supply of cash paper and a desire to take on short exposures to certain sectors of the market synthetically. Synthetic CDOs of ABCDS, an increasing focus in both U.S. and Europe synthetic ABS trading, have great potential, and investors want to participate by referencing pools of European deals, according to Ben Logan, managing director of structured finance at Markit.

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