The interest rate markets begin with technically overbought conditions and subject to some retracements. It is employment week with March employment data out on Friday. Last week the Cyprus banking crisis pushed the US 10-year note down 7 basis points in yield to 1.86% and 30 yr MBS prices increased 38 basis points. Last Thursday the S&P 500 index finally posted its new high, three weeks after the DJIA index climbed to its new all-time high. Easter Monday has the UK markets closed as well as some of the Asian markets.
Last Friday, with markets closed, February personal income and personal spending were both better than expected; income up 1.1% and spending +0.7%. Also on Friday the U. of Michigan consumer sentiment index was stronger than thought, at 78.6 from 71.8. Usually when we see income increase, the sentiment index also improves.
Early estimates for March employment: the unemployment rate at 7.7% unchanged from February; non-farm jobs +178K after increasing 236K in February; non-farm private jobs +198K after increasing 246K in February. By Friday the estimates are likely to be revised depending on other news through the week. Prior to employment on Friday, there are a number of key reports: on Monday the March ISM manufacturing index; Wednesday March ISM services sector index; and on Thursday weekly jobless claims are thought to have declined from 357K last week to 343K this week.