Last week, currency markets were very volatile as a result of fears over Euro-zone sovereign-debt and a weaker than expected US payrolls report. This week the fundamental docket is much lighter, with US retail sales the main release to look out for.

Figures on retail sales for the month of January are due out at 8:30AM on Thursday, and are expected to show a 0.3% increase according to a consensus of economists. That would mitigate the 0.3% decline that sales saw during the December period. Excluding auto’s the forecast is for a 0.6% rise. Here is a table showing of retail sales:

On Wednesday, the US Treasury posts its January federal budget results, which is expected to show a $46 billion deficit. While that would be smaller than the $63.5 billion deficit seen in January, the budget numbers will be heavy in the red throughout the year as the annual deficit is projected to hit $1.56 trillion. There are several auctions of US debt by the Treasury this week and how demand fares in those auctions will show the appetite for US Treasuries to finance the federal deficit. Also on Wednesday, the US reports its trade data for the month of December, with the deficit expected to remain close to its November level of $36.4 billion.

On Thursday, the jobless claims data may play an important role as traders and investors try and gauge the US labor market. The non-farm payroll data came in weaker than expected on Friday, and jobless claims have been posting higher than expected readings the past several weeks. If this is a temporary set-back and claims number will continue to decline will be tested this week. The expectations is for 468K claims for the week ended February 6th compared to the 480K for the week ended January 30th.

This Week’s US Releases: