The Shanghai index took it on the chin again overnight falling 4% due to worries that China won’t stop with its moves to tighten financial conditions for property buyers and to also tame the concerning rise in food inflation. The index is now down 8% from its recent high. South Korea unexpectedly raised interest rates by 25 bps to 2.5% to deal with inflation. Ahead of a meeting today with EU finance ministers, the PM of Ireland said he will consider help in order to further recapitalize its banks but their is nothing concrete in that pronouncement. Any money Ireland does get would go directly to its banks as opposed to funding their budget, in contrast to the situation Greece found themselves in where they literally ran out of money. Germany’s Nov ZEW 6 month economic outlook was unexpectedly positive at 1.8 vs the forecast of -6 and was a bounce from -7.2 in Oct. UK Oct CPI was 3.2% y/o/y, a 10th straight month above 3%.
According to Bankrate.com, long term mortgage rates have officially round tripped the post Jackson Hole ‘we will do more if need be’ Bernanke speech on Aug 27th. The average 30 yr rate was 4.5% on Aug 26th and last night it rose 8 bps to 4.51% and up 31 bps just over the past week.