Housing finance to owner occupiers down in October

Australia:  

Housing finance to owner occupiers fell by 0.8% in October, following a 1.5% increase in September. 

On an annual basis, the number of owner occupier loans contracted 4.3% in the year to October, the largest decline since December 2012. 

In contrast, the value of housing loans for investors rose 0.7% in October the second consecutive monthly gain. On an annual basis, investor home lending was its strongest in 16 months. 

The value of all loans slipped 0.2% in October and was up 0.1% in the year, suggesting that overall lending has plateaued at a high level. 

Share Markets:

The US stockmarket gained, following the tone set in European markets and boosted by upbeat US economic data.

The Dow rose by 0.7%, the S&P 500 gained 0.6% and the Nasdaq was up 0.5% for the session. Earlier in the session, the Euro Stoxx 50 rose by 0.4%, as investors continued to react to the ECB's extension of bond purchases on Thursday.

Interest Rates: 

US government bond yields rose boosted by solid US economic data.

The yield on the 10-year government bond rose by 6 basis points to 2.47% and the yield on the 2-year government bond rose by 2 basis points to 1.13%.

The Fed funds futures continued to imply a 100% chance of a rate hike on 14 December, and two more rate hikes priced in for 2017.

Foreign Exchange:

The US dollar index (weighted against a basket of currencies) gained around 0.5%.

The Euro weakened against the US dollar, perhaps also hurt by news Italy's third largest bank was refused a bailout extension from the ECB. EUR/USD fell from 1.0630 to 1.0520.

The safe-haven yen underperformed, USD/JPY rising from 114.02 on Friday morning to a ten-month high of 115.37.

The Australian dollar is trading at a similar level against the US dollar compared to Friday morning, after rising on Friday night, before retreating on US dollar gains early on Saturday morning.

The New Zealand dollar lost ground to the stronger US dollar. NZD/USD fell from 0.7188 to 0.7126. AUD/NZD rose from 1.0383 to 1.0462.

Commodities:

The oil price rose by US$0.70 to US$51.50 per barrel on hopes of an agreement on the weekend to lower global production.

On Saturday, Saudi Arabia and Russia brokered the first deal to cut global oil production in 15 years. Overall, producers have pledged to reduce production by 1.2 million barrels a day.

China:

Inflation in China was stronger than expected in November. Consumer prices rose by 2.3% in the year to November, up from 2.1% growth in the year to October.

The increase was driven by higher food prices.

Producer prices jumped 3.3% in the year to November, which was much higher than consensus expectations. This is up from an increase of 1.2% in the year to October.

It was the first time since 2011 that PPI inflation increased faster than CPI inflation (with producer prices having been through a deflationary period in recent years.

United Kingdom:

The trade deficit narrowed to £1.97bn in October, from a deficit of £5.81bn in September.

It was the smallest deficit in five months, although there were large upward revisions to the deficits for the previous three months.

United States: 

Consumer sentiment was stronger than expected in December, according to the preliminary reading from the University of Michigan.

Consumer sentiment rose to 98.0 in December, from 93.8 in November, with both the current conditions and expectations components lifting.

Wholesale inventories fell by 0.4% in October, in line with consensus expectations and the earlier estimate. This followed a decline of 0.1% in September.



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