US MBA mortgage applications w.e. 8 July -1.7% vs -5.4% prior 0 (0)

  • Prior -5.4%
  • Market index 300.0 vs 305.3 prior
  • Purchase index 224.3 vs 232.6 prior
  • Refinancing index 685.3 vs 670.3 prior
  • 30-year mortgage rate 5.74% vs 5.74% prior

Mortgage activity continues to decline with purchases dropping once again, more than offsetting a slight increase in refinancing activity in the past week. As the Fed looks set to raise rates further, the squeeze is on for the US housing market.

This article was written by Justin Low at www.forexlive.com.

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US national security advisor says still working out details on Russian oil price cap 0 (0)

Again, for this to really work, you’d have to get India and China on board surely. And that is almost certainly not going to happen, so it’s tough to imagine how they are planning to execute this in a meaningful and significant manner.

This article was written by Justin Low at www.forexlive.com.

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Italian politics back on the menu 0 (0)

Political fracture in Italy is nothing short of the norm these days and while Draghi’s reign as prime minister has been promising early on, we are seeing the same failings resurface ahead of the national election due in the first half of next year.

The Five Star Movement party is holding leadership talks today and as support for their party wither, they need a change to stay relevant and most key party figures are pointing towards breaking away from the current government coalition.

A recent split has seen the party lose a chunk of its support with many lawmakers joining a breakaway group led by Luigi Di Maio, a former leader of the Five Star Movement party. Those who have stayed on are urging for a change – blaming Draghi for watering down flagship measures that have been key pillars of the party.

The issue here is that if Five Star Movement pulls out, there is going to be a ripple effect. Matteo Salvini’s Lega party is adamant that they will not back the government if Five Star Movement withdrew from the coalition.

Meanwhile, that will also create a bit of a divide with the Democratic party – who at least still seems to be wanting to back Draghi and the government.

In any case, the wheels are set in motion already and if leadership talks this week for Five Star Movement result in a push away from the government, we could see election risks brought forward for Italy.

This article was written by Justin Low at www.forexlive.com.

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Dollar holds steady so far on the session 0 (0)

EUR/USD continues to keep around 1.0030-50 with the low earlier touching 1.0007 as the euro stays vulnerable close to parity. The outlook for the single currency is still rather poor as outlined here. But today, it is all about the dollar as the market keeps its focus on the US CPI data set to be released later in the day.

USD/JPY is holding slightly higher around 137.10-20, up 0.2%, as buyers stay buoyed in search of a further breakout this week. The retreat in Treasury yields yesterday tempered with the mood but we are seeing things pick up again today. Meanwhile, GBP/USD got a light nudge higher earlier to 1.1935 on the back of better-than-expected UK monthly GDP data but it came with a caveat.

Better health services on the month provided an outlier and the pound found little to be optimistic as such, with cable back down now to 1.1890 on the day – keeping rather flattish.

Looking elsewhere, the mood in equities is rather mixed with European indices holding lower while US futures are up slightly. That said, I wouldn’t look much into it until we get to the US CPI data later today.

This article was written by Justin Low at www.forexlive.com.

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