Treasury Market Preview by Trade the News - In focus today is the release of Advance Retail Sales for Jan at 8:30 a.m., Business Inventories for Dec at 10:00 a.m. and Fed Chairman, Bernanke's testimony to the Senate on the economy and Fed policy at 10:00 a.m. In pre-market releases, MBA mortgage applications rose 1.5% in the latest week after having fallen 0.2% in the prior week. Also on the calendar today, President Bush will hold a news conference at 11:00 a.m. - Regarding Bernanke's testimony, economists at Morgan Stanley say Bernanke's testimony will not break any new ground but they are paying careful attention to the inflation numbers that the Fed reports. In July, the Fed's central tendency forecast for core PCE inflation was 2.0 to 2.25%. - In new supply, tomorrow the Treasury will announce the amounts of 2Y and 5Y note auctions, scheduled for next week on Feb 21 and 22. - In European economic news, the Bank of England released its quarterly inflation report this morning. The BOE wrote that inflation is to fall below target by Q4 of 2007 and predicts that growth will drop below 3.0% in 2008. The BOE also sees downside risks to inflation in the near- term but upside risks over the medium term, while it views the risks to growth as balanced. Also in the U.K., average earnings inc. bonus rose 4.0% in Dec., below expectations of 4.1%. Jobless claims were -13.5K versus expectations of +5.0K. The ILO Unemployment rate held steady at 5.5% in Dec. In Germany, the government sold nearly 4.98B euros of 2017 bunds with a bid to cover of 1.8, matching that of the previously 10Y auction. Elsewhere, the DIHK research institute increased its 2007 GDP forecast to 2.3% from 1.5% and is looking for a ¼ pt hike by the ECB in March. In France, the Bank of France Business Sentiment Index rose to 107 in Jan. from 104 in Dec. - At 8:10 a.m. the 30Y future is up 4 ticks at 110 10/32 and the 10Y future up up 2 1/2 ticks at 106 28/32.