Webster’s defines ‘thrift’ as “careful management especially of money.” The short history of the euro and its individual members has been more defined by ‘spendthrift’ instead but that gig is now up. Whether it works long term or not remains to be seen but for now Greece is out with a clear plan to cut their deficit, half with spending cuts and half with tax hikes. The cost is growth and Greek stocks are down but bonds are up, giving Greece the benefit of the doubt ahead of a likely 10 yr note issue this week. Also helping is the knowledge of EU support if investors balk. With this fire out for now, attention shifts back to the US economy with jobs data over the next 3 days. After falling to the lowest level since ’97, the purchase component of the weekly MBA data rose 9%. Refi’s were up 17.2%. ABC confidence rose 1 pt to -49 but remains 2 pts below its 1 yr avg. The Pound is back above 1.50 after better than expected data in the UK.

Category: MacroNotes

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