This will be one of the most crucial weeks in the last few months for the financial markets.

Very crucial economic information this week, but none more important than Friday’s February employment data.

The key data points this week are personal income and spending for January, both ISM manufacturing and services reports, February auto and truck sales and the Federal Reserve Beige Book release.

Markets are converting the fall in confidence to far more job cuts and no improvement in wealth. We will add that many consumers that have managed to hold on and hoped to wait the recession out, are now beginning to retreat as the end is slipping farther out for many that so far have “weathered” the financial mess.

The early estimates for the February jobs report are for 20,000 additional jobs lost and the unemployment rate to increase to 9.8% from 9.7% in January.

In the beginning of this week we are not really planning on any extra growth in the bond market and we are anticipating the equity markets to be relatively quiet.

Based on the early estimates for the non-farm jobs, we believe the decline in jobs will be more than that and the joblessness level will be climbing back toward 10%.

The decline in interest rates last week is a tale of 2 stories, the ongoing increase in sovereign debt caused by debt problems in Greece and safe haven moves by investors into treasuries that are taking some financial resources off the table.

Look for the week to become progressively unpredictable by midweek as players make adjustments for employment data.

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