US high grade syndicate desks had hoped a more stable market today would allow them to start clearing some of this week's calendar.

US futures look a lot better than they did Tuesday morning, but the situation in Japan and the Mid-East shows no sign of improvement.

MARKETS

The Nikkei ended up 488.57 points, or 5.68 percent over night after a drop of around 11 percent on Tuesday, its biggest one day drop since October 2008.

The Shanghai Composite ended up 1.2 percent, with the Hang Seng ending up 0.1 percent.

In Europe, however, equities are under pressure again this morning. 

The FTSE is down 0.76 percent as of around 6:30 am. 

The DAX was down 0.27 percent.

Here at home, Dow Futures were in positive territory earlier this morning, but as of 6:35am are down around 25, with the S&P down 3.10 and the Nasdaq down 1.50.

CDS remains a tad tighter so far, although it has widened since the open.

The iTraxx Main 0.75bp tighter at 103/103.75 as of around 6:45 am after opening 1.5bp tighter.

IFR London reports the main story out of the peripheral sector this morning has come from Portugal after Moody's downgraded the sovereign two notches to A3.

This in itself should not have come as much of a surprise given that it merely brings Moody's in line with S&P, and hence reaction has been muted, with a modest 5bps wider to Germany in cash markets ahead of a closely watched 12 month bill auction.