Member Services Desk Weekly Market Update

This MSD Weekly Market Update reflects information for the week ending February 6, 2026.

Economist Views

THIS WEEK'S ECONOMIC CALENDAR HIGHLIGHTS
Date Time	Event	Period	Survey	Prior
2/10/26 6:00	NFIB Small Business Optimism	Jan	99.50	99.50
2/10/26 8:30	Retail Sales Advance MoM	Dec	0.50%	0.60%
2/11/26 7:00	MBA Mortgage Applications	6-Feb	--	-8.90%
2/11/26 8:30	Change in Nonfarm Payrolls	Jan	71k	50k
2/12/26 8:30	Initial Jobless Claims	7-Feb	--	231k
2/12/26 8:30	Continuing Claims	31-Jan	--	1,844k
2/12/26 10:00	Existing Home Sales	Jan	4.24m	4.35m
2/13/26 8:30	CPI MoM	Jan	0.30%	0.30%
2/13/26 8:30	Core CPI MoM	Jan	0.30%	0.20%
2/13/26 8:30	CPI YoY	Jan	2.50%	2.70%

Whereas last week’s FOMC noted signs of stability in unemployment, the past week’s employment-related data served to reinforce the theme of an ongoing less-than-dynamic labor market. For instance, the ADP private payrolls report posted a 22K rise, or less than half the consensus forecast, for January. Initial jobless claims, while not a large spike, nonetheless registered at the highest level in eight weeks. Perhaps weather-related dynamics played a part in these results. Challenger Job Cuts data posted its largest January increase since 2009. Lastly, Thursday’s JOLTS report registered the lowest number of job openings in five years and thereby continued the downward trend of this metric. The week ahead contains a plethora of tier-1 economic data, some of which may shed better light on the labor market. In addition to the rescheduled, owing to the partial federal government shutdown, jobs report for January, there will also be a retail sales update and the January Consumer Inflation (CPI) report. 

NFIB Small Business Optimism Index: The index for December was 99.5, up .5 from November and remained above its 52-year average of 98. January is expected to post a mild increase to 99.8.

Retail Sales: The December report will reveal trends during the holiday period. The M-o-M headline is expected to post a .4% rise, a bit lower than the month prior’s increase. The ex-auto and gas data will also be released and are expected to also register at a slightly softer pace.

MBA Mortgage Applications: After a robust start to 2026, activity cooled in the back half of January, with two straight weekly declines of 8.5 and 8.9% in the last two weeks. With rates relatively steady in the past week, a big rebound appears doubtful at this juncture.

Employment Situation Report: Because of the partial federal government shutdown this past week, the jobs report, originally due on Friday the 6th, was delayed until the upcoming week. The headline change in nonfarm payrolls for January is expected to be a 71K gain, with the unemployment rate remaining at 4.4%. Such results would generally comport with the FOMC statement’s observation that unemployment has shown signs of stabilization. Associated data on earnings and hours will also be released. Lastly and which will provide context on last year’s labor markets, the BLS will also release the final benchmark payrolls revisions for 2025. 

Initial & Continuing Jobless Claims: Claims had recently stabilized within a non-worrisome range, but the past week notched a 22K increase and was 19K above consensus forecast. Continuing Claims, meanwhile, had been on an improving trend in the past month but registered a 17K rise in this past week’s update.

Existing Home Sales: A drop of 100K is expected for January’s sales tally. If realized, this result would break a string of four straight modest increases.

Consumer Price Index: Both the headline and core measures are expected to post a .3% rise and thereby comport with last week’s FOMC comment that inflation remains somewhat elevated.

Federal Reserve Bank Member Appearances:

• 2/06/2026 12:00  Fed Governor Jefferson speaks on the economy at The Brookings Institution.
• 2/10/2026 12:00  Cleveland Fed President Hammack speaks on banking and economic outlook at University of Kentucky conference.
• 2/12/2026 19:00  Dallas Fed President Logan gives opening remarks at Dallas Fed “Global Perspectives” event.
• 2/12/2026 19:05  Fed Governor Miran speaks in moderated discussion at Dallas Fed “Global Perspectives”  event.

UPCOMING WEEK'S US TREASURY AUCTIONS
Bills	Offering Amount	Auction Date -- Settle Date
4-Week; 8-Week	105 Bln; 95 Bln	2/12 -- 2/17
13-Week; 26-Week	89 Bln; 77 Bln	2/9 -- 2/12
6-Week	90 Bln	2/10 -- 2/12
Notes	Offering Amount	Auction Date -- Settle Date
3-Year	58 Bln	2/10 -- 2/17
10-Year	42 Bln	2/11 -- 2/17
Bonds	Offering Amount	Auction Date -- Settle Date
30-Year	25 Bln	2/12 -- 2/17

Key Market Trends

Source: Bloomberg. Top pane is yield (LHS, %); bottom pane is change (LHS, bps). As of Thursday afternoon, the UST term curve was lower from a week prior, except for the 30-year. Shorter tenors led the move, as the 2-year fell by ~7.5 bps while the 5- and 10-year fell by ~6.5 and 2.5 bps, respectively. The bulk of this week-over-week decline occurred on Thursday in reaction to the weaker-than-expected jobs data that we highlighted in the previous section. The market, meanwhile, priced both higher odds and extent of Fed rate cuts this year. As of Thursday afternoon, the market prices the chance of a 25-bps Fed ease for the March 18th FOMC at ~25%, up from 15% last week. The market’s end-2026 forward is ~3.05%, or 10 bps lower than a week ago and which equates to ~2.4 25-bps rate cuts for 2026. At current pricing, yearend-2026 marks the lowest point on the forward curve.

Sources: FHLB Office of Finance; FHLBNY. In last week’s edition we noted that net T-bill issuance, after being net-negative through mid-January, turned net-positive thereafter, with Treasury skewing the issuance to shorter tenors and in sizes a bit larger than previous market expectations. While T-bill purchases by the Fed’s Reserve Management Purchase program and MBS paydown reinvestments have both helped to quell the impact of supply, there has nonetheless been supply indigestion. In addition, as we cited last week, Agency discount note issuance also popped higher in January, thereby adding further net-positive supply to short-end markets. Consequently, these dynamics have impacted our issuance and, in turn, advance rate levels and led to slightly higher levels than earlier in January. Reflecting the increase in Agency supply, shown here is the trend in FHLB-System debt outstanding as well as M-o-M changes thereof. This January registered the seventh highest net issuance in the past ~15 years. Since issuance and advance demand are highly correlated, the latter also experienced a notable rise for the month.

Source: Bloomberg. Higher advance demand in January is likely attributable to trends in asset and liability profiles. Shown here is the ratio of U.S. commercial bank loans/leases/bank credit to total assets. Also shown is banks’ Loan-to-Deposit ratio trend. Both measures exhibit a moderate upward trend, as loan growth has outpaced deposit growth, in the past six to nine months and are currently at 5-year highs.

Source: Bloomberg. This trend higher in loans is likely boosting net interest metrics for banks. Indeed, judging from recent earnings reports, net interest margin and net interest income have generally improved over the past year. The steeper yield curve has also assisted in this regard. And beneficial as well has been the gradual maturity runoff of low-yielding securities holdings. With credit risk metrics generally subdued, potential lighter regulation, M&A seemingly percolating, and stock market rotation trends, bank stocks have been on a rising trajectory. Indeed, as seen here, the BKX (larger banks) and KRX (smaller/regional banks) indices registered historic highs this past Wednesday. For context, for the 1-year period through February 4th, the BKX and KRX were up by 25.1 and 9.1%, respectively. The S&P 500 was 13.6% higher over this timeframe.

FHLBNY Advance Rates Observations

Front-End Rates

• As of midday Thursday, short tenors were modestly mixed from the week prior. Overnight and 1-week dipped by 3 and 2 bps, respectively, as month-end pressures, albeit mild, dissipated and SOFR retreated a few bps. The 3-week and 1-month tenors rose by 1 and 2 bps, respectively, and other tenors were unchanged. Meanwhile, after being negative in December through mid-January, net T-bill supply has turned positive again. Per color in the previous section and in last week’s edition, T-bills, and, in turn, our paper have widened in the past few weeks from prior notably tight levels. Fed purchases of T-bills via MBS portfolio principal reinvestments and its Reserve Management Purchases program have clearly added stability to financing markets and helped to blunt any severe impacts from the higher issuance. Money Market Fund AUM, meanwhile, remains at high levels and has absorbed short-end paper and repo demand and thereby assisted as a stabilizer.
• The highlights of the upcoming week will likely be the delayed January jobs report and then the consumer inflation report.

Term Rates

• The longer-term curve, as of Thursday afternoon and generally mirroring the moves in USTs and swaps, was 3 to 7 bps lower, with the 2-to-5-year sector leading the move. Please refer to the previous section for color on market dynamics and changes.
• On the UST term supply front, the upcoming week serves a slate of 3/10/30-year auctions. Note that UST auctions usually occur at 1pm and can occasionally spur volatility around that time. Please contact the Member Services Desk for further information on market dynamics, rate levels, or products.