Morning stuff

The looming expiration of the home buying tax credit is having a clear impact on mortgage applications. The MBA said purchases fell by 7.6%, down for the 3rd week in 4 and is now at a 10 week low. Refi’s fell 16.8% to a 5 week low as the average 30 yr mortgage rate rose to a 4 week high at 5.07%. The NAHB has a full page ad today in the WSJ on A7 begging for an extension of the tax credit. ABC confidence fell 2 pts to -50, a 3 month low and reflects the still difficult labor market. You know the US$ is in trouble when even the Pound is rallying against it. The Pound is at a 5 1/2 week high vs the $ and Gilt yields are at 3 week highs after all members of the BoE voted not to expand their QE program. On the heels of the RBA rate hike, a New Zealand official hinted that they are ready to raise rates too. In a dig to his dovish colleagues, Fed Pres Plosser said the Fed should only have Treasuries on their balance sheet.

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