After 5 stronger days, the European equity markets are mixed to slightly weaker this morning.  The US credit markets are echoing that open with slightly wider spreads.

Demand is still quite strong for US credit as evidenced by the very healthy new issue market.  Yesterday saw ~$14B in non FDIC debt issued successfully (the bulk of that was PFE).  Today, there's a deal for MMC in the market. 

Some investors are hoping for some 'market support' comments from the FOMC release this afternoon ~2:15pm but I believe that's unlikely.

Bloomberg has an interesting article on wider bid/ask spreads in the credit markets which are leading to healthy broker profits.  I'm suspect on Bloomberg's method of observation however I am not at all suspect of Lloyd Blanfein's comment about "the widest spreads he could recall."

I'm wary that any rally is not sustainable due to the wide basis (on both the index vs constituents and index vs cash bonds).  However, I am encouraged by the color I'm hearing that 'real money' is starting to buy some off-the-run bonds in the finance space. 

It should come as no surprise that bonds issued during the LBO boom with loose covenents are now suffering in this downturn; if this is a surprise to you, you can read about it here.