Secondary trading moved sideways last week despite a lack of primary paper actively marketing in Europe. Not even the $10.5 billion Granite 2006-1 deal managed to pressure trading in either direction.

"[There is] little visible supply at a time of year when there is clearly money waiting to be put to work," reported traders at Dresdner Kleinwort Wasserstein. "However, as we approach psychological barriers in terms of spread, it is conceivable that the market may simply reach a state of stagnation if the pipeline begins to grow in size from here."

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