The market is opening slightly wider on weak, but largely expected, payroll numbers.  Mixed global equity markets and wider swap spreads may push spreads wider as the day progresses.  Financials have obviously been the driver of spread weakness this week; financials were ~100bps weaker while industrials were <10bps> during the same time frame.  

The New York Times has a note about Merrill possibly mis-marking a credit index position; more clearly, they marked it down only after the merger closed after being badgered by their internal pricing folks.  This problem is rampant on both the sellside and the buyside; illiquid positions with absolutely no visible markets to use a guide.

The high yield market continues to trade at it's lows.  The high yield index (CDX) is currently priced for 52 of the remaining 95 credits to default in the next 4.5 years.  Wow, that's a grim mood.

GE is doing it's best to combat the rumors and weakness in spreads by pointing out that GE Capital will be profitable in Q1 and won't need federal funding. 

The inflows into bonds funds continue with ~$24B YTD into investment grade.  February's pace was slower than January.

To steal another trader's comment about the Vix at ~50 (vs highs of ~80) "the mood has moved from panic to despair."