After 5 weeks in a row of declines totaling 28%, notwithstanding historically low mortgage rates, the MBA said refi apps for the week rose 13.1% to a 4 week high. Purchase apps rose 11% also to a 4 week high. With the stabilization in housing a bright spot, albeit off dramatically low levels, lets hope this continues. Of note in Asia is the biggest one day decline in the yen in 2 mo’s after the Japanese PM threatened to throw out Parliament and hold new elections where the opposition party LDP would likely win which could lead to an even bigger role of the BoJ in printing yen to try to boost inflation. This news occurred after the Nikkei closed. As today closes the Chinese govt transition, the yuan is rising to a new 19 yr high vs the US$. India’s wholesale inflation in Oct fell to 7.45% y/o/y, an 8 month low and maybe gives the RBI room to cut rates. In Europe, UK Jobless Claims unexpectedly rose by 10.1k, the biggest increase since Sept ’11 and Sept was revised up. BoE Gov King today acknowledged UK stagflation by saying “we face the rather unappealing combination of a subdued recovery with inflation remaining above target for a while.” Euro zone IP in Sept fell a touch more than expected and Italy sold 5b euros of debt consisting of 3s, 10s and 16s, in line with their target. Portugal’s economy contracted for an 8th straight quarter in Q3 and their gov’t followed that with an “enormous increase in taxes” at the same time trying to “identify cuts in public spending” said their Fin Min back in Oct. The echo has reached US shores post election.

II: Bulls 38.3 v 43.6 Bears 28.7 v 27.7

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