There are few major dislocations in ABS at present. Down-in-credit trades on top-tier issuers are still a way to pick up additional yield and preserve liquidity, but good cross-sector bets remain hard to find. That said, two-year fixed rate autos are now very tight to two-year fixed rate cards. They are currently only 1 bp behind cards, so selling fixed autos and buying cards with this average life appears attractive. Also, the firm reiterates that 5-year and 7-year average life SLABS are cheap on a generic basis to credit card ABS.

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