Economy

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Australian third quarter GDP was reported at +0.3% q/q much lower than the expected +0.6% and the previous quarter's +0.9%, On a yearly basis the growth rate is 2.8 % lower than the expected +3.3% and  prior +3.4%. The Australian dollar sold off sharply on the news.

Inflation is boiling in the U.S. or it is distorted by trade tarrifs? US October PPI came out hot +0.6% vs +0.2% m/m expected up from September's +0.2% m/m. On the year PPI is +2.9% vs 2.5% y/y. The US Dollar rose sharply on the report, the stock markets dumped.

With tariffs and trade wars front and center the US trade deficit has been a hot topic. In September the US had a $54 billion deficit up from $53.3 billion in August. The deficit with China was $40.24 billion and is a record high likely to fuel the tariff threats from the U.S. to China.

U.S. October non farm payrolls were much higher at  250,000 then the expected 200,000. Unemployment stayed at 48 year lows. We are still digesting the effect trade wars on jobs with tensions affecting employers.

Real gross domestic product (GDP) increased 3.5% in the third quarter of 2018, according to the “advance” estimate released by the Bureau of Economic Analysis. Core PCE +1.6% vs +2.1% expected

Rating agency Fitch affirmed Australia's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'AAA' with a stable outlook. Last month Australia's AAA sovereign rating was affirmed by S&P Global Ratings and the outlook was revised up to 'stable' from 'negative'.

The housing market has been struggling most of the year, part of it is rising interest rates. US MBA reported mortgage applications grew +4.9% vs -7.1% the prior week as mortgage rates hit a 7 year high. Was this borrowers fearful of higher rates? New Home Sales Fell 5.5% on the month.

With tariffs and trade wars front and center the US trade deficit has been a hot topic. In August the US had a $53.2 billion deficit up from $50.1 billion in July. The deficit with China was $34.40 billion likely to fuel the tariff threats from the U.S. to China.

U.S. September non farm payrolls were much lower at 134,000 then the expected 185,000, but the net revision was 87,000 more jobs. Unemployment fell to 48 year lows. Wages continued to rise. We are still digesting the effect trade wars on jobs with tensions affecting employers.

Record exports saw Australia reach a much larger than expected trade surplus for the eighth month in a row. Australia's a trade surplus was up from a revised A$1.548bn to A$1.604bn in August the ABS said. Exports of non-monetary gold soared 13% (A$229m).

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