Mortgage applications rise 1.7%
As interest rates continue to fall, an index of home loan demand increased to 522.2 for the week ended July 11, up from 513.4 a week earlier, according to the Mortgage Bankers Association. Refinancing activity grew 6.9%, but applications for loans to buy a home dipped 1.7%. The average 30-year fixed mortgage rate fell to 6.22%.
The Fed must not wait too long before raising rates or it risks a serious problem with inflation, said Kansas City Fed President Thomas Hoenig. Euro zone inflation doubles target
Consumer prices in the 15-nation currency area rose 0.4% in June, for a 4% year-over-year gain, driven by soaring fuel and food prices, Eurostat said, confirming preliminary results. The European Central Bank, which wants annual inflation to be just below 2%, raised interest rates to 4.25% in July. Some economists see inflation hitting 4.3% over the summer.
U.K. jobless claims rose by 15,500 in June, from May's upwardly revised 14,300 gain, marking the 5th straight monthly increase, the Office for National Statistics said. It was the largest amount since a jump of 71,000 in 1992. China softens tone on inflation
With inflation easing from Feb.'s longtime high of 8.7%, Beijing hinted at a slight relaxation. A gov't body vowed to maintain its tight monetary policy for the rest of '08 and said curbing price pressures would be a "prominent task." But any reference to the inflation fight as a "top priority" was absent from the gov't statements. Sources have told Reuters that China's inflation cooled to 7.1% in June. Official figures for inflation and Q2 GDP are due on Thu.
Canadian factory sales rose 2.7% in May, the biggest jump since March '07, driven by soaring petroleum and coal prices. On a volume basis, sales rose just 0.2%. COMING UP THURSDAY
Housing starts for June, 8:30 a.m. EDT (forecast: 960,000; building permits, 965,000). Jobless claims for the week ended July 12, 8:30 a.m. EDT (forecast: 380,000). Philadelphia Fed index for July, 10 a.m. EDT (forecast: -15).
