Massive spike in building approvals driven by apartments
The number of residential building approvals jumped 14.4% in September to the highest level in 3½ years.
The upswing in housing lending is spilling over to building approvals.
Typical of this data series, the surge in the month was driven by the 'other dwellings' component, which includes multi-dwelling developments such as high-rise apartments.
This category rose by 31.8% in September. However, even when abstracting from this volatile other component, building approvals remains on a clear upward trend.
Across States, NSW is leading the charge. NSW building approvals lifted 25.2% to the highest level in nearly eleven years.
Private sector credit grew at a very modest pace of 0.3% in September.
The annual pace of credit growth edged down from 3.4% to 3.3% in the year to September and remains low by historical standards.
The detail, however, is suggesting some areas of credit growth are picking up. In particular, an upturn is most apparent in investor housing.
Annual credit growth in this category has picked up to 6.1%, the fastest annual growth since May 2011. Other areas of credit growth remain subdued. Low interest rates should support a further pickup in credit growth, but a return to the double-digit growth pre-GFC is highly unlikely.
In other data, import prices rose 6.1% and export prices lifted 4.2% in the September quarter. The data reflect the weaker Australian dollar in the quarter. Given import prices rose by more than export prices, it implies the terms of trade fell in Q3.
US share market bourses fell overnight, as market participants speculated that the US Federal Reserve might scale back stimulus in coming months.
The S&P 500 index closed down 0.4% and the Dow Jones finished 0.5% lower.
US 10-year Treasury bond yields rose from 2.50% to 2.57% - a seven-day high.
The bond market has reassessed its expectations for Fed tapering after yesterday's FOMC and today's data. The consensus is March but some assigning December a small chance.
Australian 3-year government bond yields (implied by futures) rose from 3.00% to 3.07% and the 10-year yield rose from 3.95% to 4.04%.
The US dollar index extended its rally into a fourth day.
EUR/USD fell from 1.3716 to 1.3660 following the weak European inflation data, and further to 1.3584 following the US data.
USD/JPY ground slightly lower, from 98.40 to 98.10. AUD/USD fell from 0.9526 to 0.9452, but stayed above the previous day's range.
NZD rose from 0.8233 to 0.8311 before slipping back to 0.8262.
AUD/NZD fell from 1.1520 to 1.1437, the market disappointed the RBNZ wasn't more dovish.
Crude oil fell for another night to its lowest level in four months as US stockpiles increased.
Gold also fell again and posted its biggest loss in nearly three weeks.
Base metal prices also weakened.
Eurozone unemployment held at an all-time high of 12.2% in September and the growth rate of the CPI eased to 0.7% in the year to October, the slowest since the 2009 recession.
The core annual rate of CPI was 0.78% in October - the lowest on record for the single-currency area.
The Bank of Japan (BoJ) left monetary policy unchanged, keeping in place the expansion of Japan's monetary base by 60 to 70 trillion yen annually.
Housing starts rose 19.4% in the year to September, exceeding market expectations for 12.1% growth.
Building permits rose 1.4% in September, following an upward revision to 1.5% in the previous month.
Earthquake-related re-construction is helping to boost permits. Rising house prices and low interest rates are other factors supporting an upswing in residential investment.
Business confidence fell marginally in October according to the ANZ survey. A net 53.2% of respondents expect the economy to improve over the year ahead, slightly below the net 54.1% in the previous month.
Consumer confidence slipped from -10 to -11 in October. It is the first dip since April but still close to 2007 highs. House prices rose by 5.8% in the year to October, according to Nationwide.
It is the fastest pace of growth since 2010 as BoE/Treasury lending subsidies impacted.
The Chicago PMI jumped from 55.7 in September to 65.9 in October. It's the highest reading since early 2011 and is probably related to a post-government shutdown hump in confidence. However, the Milwaukee PMI rose by just 2.1 points to 57.1 in October.
US initial jobless claims fell 10k to 340k in the week ended 26 October, still elevated as the US government shutdown ended.