According to the Wall Street Journal, the number of U.S. workers filing unemployment rose again last week by 22,000 to a total of 496,000 initial claims for the week ending February 20th. This unexpected surge in claims is thought to have been contributed by the major snow storms which left many people without work.
Undoubtedly, one of the topics during Bernanke’s report will be last week’s increase in the discount rate by the Fed. Also, today’s January new home sales report is expected to show an improvement.
On Monday government bond prices were mostly lower following the Treasury’s uninspiring auction. The U.S. government today will auction $44 billion of 2-year T-notes as this week’s record debt sale continues.
Treasuries are mixed ahead of this week’s huge Fed auctions totaling $126 billion.
According to Bloomberg, the Mortgage Bankers Association reported a record number of foreclosures for the fourth quarter. Loans in foreclosure rose to 4.58% of all mortgages, and the number of mortgages that were more than 90 days overdue rose to 5.09%.
Bonds were on a downward slide all day yesterday. Today mortgage bonds are slightly lower from yesterday’s close. This morning’s economic releases included the January CPI report which was expected to show an increase on a year over year basis, the January CPI was expected to edge higher to +2.8% year over year.
Construction on new housing posted better-than-expected results, for an increase of 2.8% in the month of January. This is the highest level of activity for housing starts in six months. This positive report is thought to have been influenced by the first-time home buyer tax credit and the low mortgage rates. It is also a sign that the housing market may be stabilizing, and recovering slowly but surely.
We have a lot of economic releases slated for today, beginning with January’s housing data, which came in higher than expected and is sending bond markets down even further.
This week will focus on the outcome of Monday’s European finance ministers meeting and whether there are any concrete details about how the EU plans to bail out Greece and key economic reports.
The market is closed today in observance of the President’s Day holiday. There are also no economic releases slated for today, but notable releases this week include tomorrow’s NAHB Housing data, Wednesday’s housing data and FOMC meeting notes, along with Friday’s inflation report (January’s consumer price index).