Consumer more sober on economy than multinationals

Following the 5 mo low in the Conference Board Consumer Confidence index where the survey cutoff date was July 21st, the weekly ABC confidence poll fell 3 pts to -48, the lowest since Apr and is now below the 1 yr average of -46. The drop was led by the Personal Finance component which now matches the lowest since Nov ’09. With a 10 bps rise in mortgage rates, the MBA said refi’s fell 5.9% off the highest level since May ’09 but purchases rose for a 2nd week by 2%. Southern European bonds continue to rally after Portugal successfully sold 4 yr and 13 yr notes, sending their 10 yr yield back below 5% for the 1st time since June 2nd and their 2 yr yield is down a sharp 52 bps to the lowest since mid May. The fly in the European ointment continues to be the daily rise in interbank lending rates as 3 mo Euribor rose to a 1 yr high and hasn’t fallen since Apr 20th. This is a de facto tightening of policy. Chinese stocks closed at a 9 week high.

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