DC Lite #277

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Administrative update: As a reminder, DC will be off tomorrow.

1. Mortgage demand. "Mortgage demand is crumbling. For the week ending January 3, mortgage loan applications for purchase sank 6.6%, the 4th decline in the last 5 weeks. The level of conventional purchase apps lowest since 2011! 30-year FRM back to 7%."

2. Consumer credit change. Total consumer credit declined by $7.49bn in November (vs. -$10.3bn est) driven by a $13.7bn decline in revolving credit, the largest drop since Covid.

3. Term premium. "After a long period when the term premium was negative, it’s now its highest in almost 10 years."

4. USD spec positioning. "I want the U.S. dollar to decline. It would help every one of my positions. But I can't square that with the fact that every peak in the buck over the past 20 years was accompanied by speculators holding at least 50% of futures net long. It's only 15% now."

5. Drawdown risks. "Less negative inflation momentum, valuation expansion and higher policy uncertainty have driven the increase in drawdown risk."