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).
The retail sales report released by the Commerce Department today showed that sales have actually increased by 0.5% in January. While this release was initially scheduled for Thursday, a snowstorm delayed the report until today – Friday. This reportis an important indicator of consumer spending, which in turn influences the rate of economic recovery.
In economic news, today’s focus will be on the retail sales report which came in higher than expected, further signaling that the economic recovery is underway.
The weekly jobless claims data was released this morning, and initial claims came in relatively close to expectations. In chairman Bernanke’s testimony yesterday, the Fed Chairman stated that the Fed could soon possibly raise the discount rate, which is the rate that they charge commercial banks through their discount window.
Treasuries came under pressure yesterday following a disappointing 3-year auction and on speculation that the European Union will, in fact, step in to provide financial assistance to Greece.
The Treasury will auction off $81 billion in additional notes this week, starting with today’s sale of $40 billion 3-year notes. The 3-year note has recently been a particular favorite of foreign central banks who have represented about 49% of bids at the last few 3-year auctions.
Also, the Treasury will be auctioning $81 billion in longer-term Treasuries which will add pressure to any interest rate improvement this week.
The highly anticipated monthly jobs report was released today. January saw job losses of 20,000 and did not turn positive as expected.
Bonds traded lower yesterday after the ADP Employment Change Index (Jan), declined by -22k, less than the -30k expected while the December revision improved by over 20k.
Mortgage applications increased 21% for the week ending January 29th, with the purchases increasing 10.3% and refinance activity increasing 26.3%.