Mortgage purchase applications were up 9% for the week but down 16% from same time last year. Now that Spring is here, it is difficult to continue to blame the Winter especially given that this has been a weak trend for some time now. Don't expect any rebound anytime soon.
Fed Chair Janet Yellen reiterated her stance that the US economy is on track for recovery but that further weakness could hold it back. She also continued that short-term interest rates would remain low for a long time.
Euro zone Purchasing Managers Index (PMI) increased from 53.1 to 54.0 and reports of business activity increased across the Euro zone but prices remained a weak component as inflation is under 1%. While the Euro zone is not falling off a cliff, prices paid by manufacturers was soft indicating a lack of inflation. Much of this gain is due to exports, in particular to China which is showing signs of slowing down so this trend may not last long. So for now the ECB will hold off on any additional monetary stimulus however they have made it clear that more will be considered for June.
Japanese PMI tanked from 52.8 (above 50 means growth) to 46.3 a clear contraction. Consumers simply reduced spending after tax increases went into effect on April 1st. Japan wants people to spend more so they are driving inflation higher however they are also raising taxes because the government is basically bankrupt. The problem is that people don't have more money with which to buy stuff and/or pay taxes. Expect more stimulus from Japan which will drive their currency lower and still not help to bring their economy out of the hole.
In another sign of slowdown in China, Chinese companies have increased business to business lending because there is a lack of traditional lending sources. This is exactly what brought down Lehman Brothers. Companies borrow funds short-term and when the loans come due they cannot find willing lenders. This is causing corporate defaults, expensive loans, and brings China one step closer to a credit collapse.