It is not fundamentals which are driving market but angst associated with EU debt. The fact is that there never has been a real plan to deal with EU debt just a method of delaying any solution. When the political calculus changes all assumptions are tossed and no one knows what will happen.

For now that means uncertainty, which means mortgages (MBS) and Treasuries do well, and keep rates low.

Here are today’s fundamentals.

Mortgage Applications
-Purchase Index, Week/Week +3.4%
-Refinance Index, Week/Week +1.3%
-Composite Index, Week/Week 1.7%

The gains in the purchase index do not offset the losses of the previous 4 weeks.

Wholesale Inventories
-Inventories, Month/Month +0.3%