Housing begins to show unexpected strength


The number of new home loans was stronger than expected, rising 4.4% in September, after declining 4.0% in August.

The value of new home loans jumped 5.3% in September, while the value of investor lending climbed 5.2% in September.

For the year to September, the value of new home loans is up 14.2%, while the value of new investor loans is up 21.9%. The proportion of first home buyers hit a record low in September (since these records began in 1991).

Share Markets:

US equity markets were subdued overnight due to the partial closure of markets for the Veterans Day holiday.

Banks and the bond markets were closed and there was no data of significance released in the US or Europe. Light trading saw the Dow edge higher while the S&P500 and the Nasdaq were effectively flat.

In Europe, the FTSE100 and the Dax both rose 0.3% while the French CAC40 index rose 0.7% to be up 47.5% over the past twelve months.


Bond markets were closed in the US. The US 10 year treasury bond futures market remained open but yields remained unchanged, with an implied yield of 2.75%.

In Australia, 10 year government bond yields pushed 9 basis points higher to 4.22% possibly in anticipation of an eventual tapering of bond purchases by the US Federal Reserve.

Foreign Exchange:

The US dollar index was marginally softer overnight. The AUD, however, weakened against the USD and the other major currencies. Markets were thinner than usual due to the partial US holiday and with no direction given from economic statistics.


Oil prices edged higher as talks between Iran and six major nations in Switzerland failed to reach agreement on Iran's nuclear programme.

The dispute suggests Iranian oil exports will remain constrained.

The price of gold moved a little lower as expectations rose that tapering of US bond purchases will happen sooner in 2014 rather than later due to the better than expected jobs report last week. Copper prices were broadly steady.


No data released.


The current account surplus widened to a five-month high in September, benefiting from a weaker Yen. The current account surplus rose to ¥587.3bn in September, from ¥161.5bn in August.

The income surplus rose 24.6% to a record for September, driven by higher incomes from foreign investments, due to the weaker Yen.

United Kingdom: 

No data released

United States:

No data released. Debate is intensifying over when the US Federal Reserve will begin tapering its bond purchases.

All players agree that the bond buying program cannot continue indefinitely.

The debate centres on the robustness of the US recovery. Many, including us, suggest that until the US government sorts out its longer term budget and debt issues, full health cannot be restored.

Uncertainty over future taxation and government spending is hindering private sector decision making.