Import Prices fell .2% versus the .8% fall that was expected as petroleum prices rose for the first time in 7 months.

Over the past 12 months, import prices are down 12.8%, the largest decline since they started to publish the index in 1982.

Export prices fell .1% in the same time period and are off 3.6% over the last 12 months.

Since the fall in import prices over the last 12 months exceeds that of export prices, America’s term of trade has improved.  It also tells you that the global economic landscape has slowed dramatically compared to ours at home.  The trade deficit for January fell 9.7% to 36 billion.  The trade deficit has declined for the past 6 months as a slowing stateside economy has led to reduced imports.

The Michigan Sentiment Survey was the caboose of economic data releases for the week.  The index surprised on the upside, rising .3 to 56.6.  The increase was due to an improved outlook down the road and may be a sign of early stability coming back into the psyche of the consumer.

On the caution front, China’s Premier, Wen Jiabao made statements about the “safety” of U.S. Treasury debt and admits to being worried about their holdings.  Maybe he will take Disney Land as additional collateral.  Seriously, Treasury Secretary Geithner needs to do a little smoozing at the G-20 meeting this weekend to keep them happy.  If the Chinese start selling their gazillion dollars worth of treasuries, mortgage pricing will get ugly fast.  That is not today’s case.

Stocks seem to be taking a little profit (Down down 51 points), the 10 year note has snapped back from earlier losses, currently up 12/32’s to yield 2.84%, and mortgage backs are up a couple thirty twos after a drop of the same amount on the open.

One more thing, Fed Chief Bernanke will be on 60 minutes this Sunday.  Should be worth the watch.  Have a great weekend.