Benchmark interest rates are largely unchanged as are equity futures this morning ahead of a rush of data and events.

The 10 year Treasury note is +1/32 at 93-26 yielding 3.369%. The February FNCL 4.5 is UNCH at 102-09. S&P 500 Futures are 0.50 points lower at 1,283 and Dow Futures are 4 points higher at 11,712. Year to date, the S&P has already climbed 2.25%. The benchmark index rose nearly a full percentage point yesterday thanks to the Fed’s latest Beige Book report, which depicted a recovering economy led by retail and manufacturing activity. The labor market appears to be “firming somewhat,” the Fed added.

The euro is under pressure after Spain offered €3 billion in five-year bonds . The debt sold at an average yield of 4.542% versus 3.576% last November. Italy also sold €3 billion in 2015 bonds which offered a yield of 3.67%, versus 3.24% in November. The auctions were well-attended though.

Meanwhile, Moody’s Investors Service said triple-A-rated nations including France, Germany, the U.S. and the UK must take steps to control spending.

Key Events Today:

8:30 ― The Trade Balance is expected to deteriorate in November to a deficit of $41 billion, versus a gap of $38.7 billion in October. The October deficit was the narrowest since early 2010, as exports jumped 3.2% for a second straight increase, while imports slumped for a second month.

“We expect both exports and imports to move higher, but exports to rise slightly faster,” said economists at IHS Global Insight. “We expect some easing in consumer goods imports after a sharp jump in October. For the fourth quarter, foreign trade is shaping up as a major plus for GDP growth, as export growth has bounced back after a quiet third quarter, while import growth has slowed.”  

8:30 ― Rising oil prices are expected to push the Producer Price Index up 0.8% in December, putting the annual change at +3.8% (up from +3.5%). Core prices, which excludes volatile oil and food costs, are anticipated to rise a slimmer 0.2%, leaving the annual change at +1.4% (up from +1.2%).

“The big shove will come from double-digit gains in gasoline, diesel, and heating oil because of higher crude oil prices,” said economists at IHS Global Insight. “Another climb in food prices won't help, but oil will be the major culprit.”

Economists at Nomura agreed, writing that “finished energy prices in particular look to have increased sharply during the month, but we expect that the food index was about unchanged.” 

They added that an end to auto-related volatility should keep the monthly core index at 0.2%. 

8:30 ― Initial Jobless Claims rose in the final week of 2010 but the four-week still managed to decline to 410,750 ― the lowest since late July 2008. December’s nonfarm payrolls report didn’t meet optimistic expectations based in large part on the falling number of claims, so the market will want to see if the trend is still on a downward course or whether lay-offs slowed down merely due to the holidays. 

Meanwhile, continuing claims ― a tally of all those still receiving regular unemployment benefits ― fell 47k in the week of Dec. 25 to 4.103 million, the second lowest in more than two years.

The consensus forecast for initial claims this week is 402k.

10:15 ― The Fed will purchase an estimated $7-9 billion in Treasuries maturing between 2016 and 2017.

1:00 ― Ben Bernanke, chairman of the Federal Reserve, participates in a “Framing the Issues” panel before the Federal Deposit Insurance Corp.’s  “Overcoming Obstacles to Small Business Lending” forum.

Treasury Auctions:

• 1:00 ― $13 billion 30-Year Bonds