Supply surprised to the upside this week and investors consequently sold the mostin the secondary market since June of 2020 to fund the calendar yet spreads onlywidened about 1bp on the week to 112bp. In our view, this is testament to thecontinued strong appetite for HG spurred by yields rising 16bp (or 6%) from 6mlows hit last week. It would appear that the prospect of the Delta variant weighingon the growth outlook in H2 2021 is pushing investors to rapidly put money towork on any yield backup. That said, the fact that investors were significant netsellers of secondary paper to fund the calendar implies that many expect anadditional wave of supply come September, as is usually the case. The bear casefor spreads near term would be if somehow the current COVID wave morphs intosomething more disruptive, e.g. in the unlikely scenario where vaccines start toprove less effective than currently thought. Additionally, after being surprised bythe appetite from issuers this week some investors may choose to lighten up intoSeptember in anticipation of the usual heightened primary activity in the early fall.Our bias is to continue to expect an incremental grind tighter, our current YEforecast remains at 105bp or 8bp tighter versus current levels.