Market Analysis

Bond markets are improved this morning and stock markets are down on a knee-jerk reaction to China announcing the specifics of higher reserve requirements for their banks and on a low 4th Qtr GDP report for the 16 countries that make up the Euro-zone.  The higher reserve requirements in China were expected, but the specifics had been unknown.  These requirements are designed to reduce lending and growth to try to get in front of inflation.  In Europe, 4th Qtr GDP grew .1% vs expectations of .3% growth and vs .4% growth in the 3rd Qtr. 

January's Retail Sales were released today showing an increase of .5% as expected and, with the auto component, up .6% which was slightly better than the .5% increase expected.  The University of Michigan Consumer Sentiment index for February was 73.7, slightly lower than the 75,0 expected.