EM CREDIT RATING: SSE: S&P Outlook Stable

• MBA composite mortgage applications increased 1.7% (sa) last week after 0.5% the week prior, showing some marginal resilience after previously large declines in refi-applications in particular following the bounce in mortgage rates.
• New purchase applications increased 2.0% after 1.9% whilst refis increased 1.8% after -1.5%. They do however remain -9% and -54% below early Oct/late Sep recent highs respectively.
• The 30Y conforming mortgage rate increased another 4bps to 6.90% in the latest week, up 76bps from the September lows around 6.14%. 

ECB Vice President de Guindos provided few new signals in an interview with Bloomberg TV. He re-iterated that the ECB is likely to “continue reducing the restriction of our monetary-policy stance over the next months and quarters”, but still cautioned the need for a “prudent” approach.

• De Guindos has made several appearances since the October decision, but has not provided any major deviations from the bank’s central guidance.
• This is relatively unsurprising given his seniority amongst policymakers and his (relative) focus on financial stability.
• He previously stated on Nov 6 that the ECB would not react immediately to the threat of increased US protectionism following Donald Trump’s election victory: “What we will do is we will incorporate into our projections the trade policy that is announced by the new US administration. And we will take into consideration all the elements”.