At 10:00 the bond and mortgage markets are unchanged from yesterday's closes. The DJIA -40.

There are no economic reports today; the main driver for the bond market will rest with the $35b 3 yr note auction at 1:00. We expect the auction to be well bid, investors are moving to the lower end of the curve as was evident yesterday. The 10 yr note yesterday saw its yield down 2 basis points while the 2 yr note yield fell 9 basis points from last Thursday's close. Tomorrow the long end will have a bigger test with $19B of 10 yr notes to be auctioned.

The week is absent of economic data; the markets will focus on the beginning of the earnings season that kicks off today. Equity markets, to remain firm will need good earnings as companies report results of Q2 activity and possible gains.

The ICSC-Goldman retail sales were up 0.1% frm the previous week but the increase is much smaller than the previous week to week gains which were up 1.6%. Yr/yr sales were up 0.5%, again lower than yr/yr last week at 0.6%. Not a big change so not much concern evident. This weekly measure of comparable store sales at major retail chains, published by the International Council of Shopping Centers, is related to the general merchandise portion of retail sales. It accounts for roughly 10 percent of total retail sales.

The Johnson Redbook retail sales a little better than previous release at -4.2% yr/yr, up from -4.3% yr/yr the week before. A weekly measure of sales at chain stores, discounters, and department stores. It is a less consistent indicator of retail sales than the weekly ICSC index. The two reports this morning suggest consumers are still keeping their hands in their pockets and increasing savings; purchasing only necessities.

Remember Laura Tyson, Clinton's main economic adviser? In a speech last night in Singapore she called for another Obama stimulus package; saying the 1st one of $787B isn't enough as the economy is worse than the administration thought.

The ABA is saying today that home equity loan delinquencies jumped substantially in Q1, to 3.52% of all accounts in the quarter from 3.03% in the fourth and late payments on home-equity lines of credit climbed to a record 1.89%. An index of eight types of loans rose for a fourth straight quarter, to 3.23% from 3.22 percent in October through December. ABA said the biggest reason for the increases is job losses.