This week the firm highlights the relationship between BBB CMBS spreads and unsecured REIT spreads. First, analysts recommend a "buy BBB CMBS/sell REIT debt" trade, which offers more spread pickup than at any point in the past three and a half years. Additionally, as it has argued for some time, the BBB/REIT relationship has been an important confirming signal for the down-in-quality trade in CMBS. JPMorgan has been recommending down-in-quality trades in CMBS since early December.

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