Economy

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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).

The Euro jumped over 1.1800 against the dollar after ECB chief Draghi delivered a hawkish testimony in Brussels. He said domestic price pressures are rising and that he sees a relatively vigorous pickup in underlying inflation.

Higher property and stock prices have pushed Americans household wealth to record highs. U.S. President Trump may be the most divisive President in history but the Federal Reserve shows Americans are getting weathier with him. 

Australia saw much stronger than expected full and part time jobs growth in August, with the participation rate edging higher also. Trend unemployment is at its lowest since September of 2012. Participation highest since Dec of 2010.The unemployment rate stayed at 5.3%. 

The NFIB Small Business Optimism Index hit 108.8 in August, the highest in the survey’s 45-year history and beating the July 1983 highwater mark of 108. Tax and regulatory changes have fed the optimism.

U.S. August non farm payrolls were higher at 201,000 then the expected 191,000. Wages rose at their fastest year-on-year pace since the Global Financial Crisis. We are still digesting the effect trade wars will have on jobs with tensions affecting employers.

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