Economy's swing into recovery still holding steady

Australia:

Private sector credit grew at a modest pace of 0.3% in October, the third consecutive month of growth at this pace.

Annual growth remained at a sub-par pace of 3.5% in the year to October, although this was the strongest rate of annual growth in nine months.

The sector breakdown is reflecting the relative strength of the housing market within the domestic economy.

Credit for investor housing remains particularly strong. Annual credit growth for investor housing lifted to 6.4% in the year to October, the strongest in 2½ years.

Other areas of credit growth, including business and other personal, remain weak. The recovery in credit growth for these sectors is subdued and uneven.

Share Markets:

The US stockmarket had a mixed session with tech stocks gaining, while the broader market dipped, amid holiday-thinned trading.

The Dow and the S&P 500 lost 0.1% for the session, while the Nasdaq rose 0.4% to a 13-year high.

Bonds: 

US government bonds were little changed, given thin volumes following the Thursday Thanksgiving holiday in the US, and on a lack of direction ahead of significant economic data releases this week.

Foreign Exchange:

The Aussie dollar lost some ground on Friday, but opened stronger this morning and continued to strengthen.

The release of a stronger than expected manufacturing index in China on the weekend provided support to the local currency.

After strengthening on Friday, the Euro lost ground on Friday night.

The Yen weakened versus the US dollar and the Aussie dollar amid ongoing expectations of monetary stimulus in Japan.

Commodities:

Commodity prices strengthened, with signs of stronger economic growth supportive. The gold price gained on signs of increased demand from China. 

China:

The official manufacturing PMI held at an 18-month high of 51.4 in November, defying consensus expectations for a decline.

The reading remains above 50 indicating manufacturing activity in China continues to expand.

Today the HSBC/Markit manufacturing PMI is released and is also expected to show Chinese manufacturing activity is expanded in November.

Europe:

The Eurozone unemployment rate eased from 12.2% in September to 12.1% in October, its first decline since early 2011.

The resumption of economic growth across the Eurozone seems to be showing through, although national data showed that the French unemployment rate falling from 11.1% to 10.9% was a driver, somewhat surprising given that economy's renewed contraction in Q3.

The Eurozone CPI flash was 0.9% for the year to November, up from the surprisingly low 0.7% in the year to October, perhaps taking a little immediate pressure off the ECB, when contemplating further easing.

German retail sales fell 0.8% in October, their fourth decline in 5 months, with only food posting a rise among the major store types. Retail volumes are down -0.2% for the year to October.

In ratings news, Standard & Poor's downgraded the Netherlands from AAA to AA+, due to economic growth concerns.

Standard & Poor's upgraded Spain's BBB- outlook from negative to stable, citing the end of the recession and ongoing spending cuts.

Japan:

The jobless rate held steady at 4.0% in October. However an increase in the availability of jobs (the jobs-to-applicants ratio) to a six-year high point to improvement in the job market.

In a sign that Japan is on track to battling deflation, core consumer prices (which excludes fresh food) lifted from 0.7% to 0.9% in the year to October. Core inflation was the highest in five years. The national headline rate of inflation was unchanged at 1.1% in the year to October.

Industrial production rose 0.5% in October, below consensus expectations for a 2.0% increase.  Despite falling below expectations, it was the second consecutive monthly increase.

Annual growth slipped from 5.1% to 4.7% in the year to October.

Housing starts rose 7.1% in the year to October, down from 19.4% annual growth in September.

New Zealand:

Building permits fell 0.6% in October following a 1.4% gain in September.

The fall was the first in three months. It is probably too early to gauge if the housing market is beginning to lose some steam, but measures by the RBNZ have been undertaken to cool housing.

Statistics NZ has said that the "trend for new houses is at its highest in over five years, but the rate of increase is easing". 

United Kingdom:

UK mortgage approvals rose to 67.7k in October, a new post-2008 high, and mortgage outstandings rose a further £1.2bn, the first string of three monthly rises above a billion this decade. Hence the BoE announcing the scrapping of subsidized lending for mortgages.

Other data showed house prices accelerating from 5.8% in the year to October to 6.5% in the year to November, according to the Nationwide, their fastest since 2010.

United States:

There was no economic data released in the US due to the unofficial holiday.



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