Dubai, Greece remain under pressure but US$ doesn’t benefit

The two sovereign problem children remain under pressure this morning. Dubai’s stock market fell another 6.4% and is down 27% over the past 2 1/2 weeks. Greece is down 2% and their 10 yr bond yield is spiking another 16 bps to 5.50%, up 10% in 3 days. The Finance Minister in Greece said there is “absolutely…no risk of default…as we signal that the situation is coming under control.” The US$ index though is lower and it’s helping to boost the futures. ABC confidence fell 2 pts to -47, matching a one month low as the State of Economy component fell to a 3 month low. The MBA said refi’s rose 11.1% on the week to a 2 month high while purchases were up 4% to a 5 week high. Stock market sentiment remains a bit confusing as measured by the weekly II data. Those bulls expecting a correction rose to the highest level since March ’92 but outright bears fell to the lowest since June ’03. The 10 yr note auction will be the highlight of the day.

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