Approvals figures indicate volatility in dwelling markets


Building approvals fell 8.2% in June, driven down by a pull-back in apartment development approvals. 

Over the year to June, dwelling approvals were up 8.6%. Approvals of private sector houses rose 4.3% in June to be up 3.3% on a year earlier. 

Approvals of 'other dwellings' fell 20.4%, however these numbers are highly volatile and a rebound is possible in future months. 

Over the year to June, approvals of 'other dwellings' are up 16.3%. Despite the fall in June, approvals remain at historically high levels suggesting that the pipeline of construction work remains solid.

The export price index fell 4.4% in Q2 from -0.8% in Q1. In the year to Q2, the index dropped 8.9%. The import price index rose 1.4% in Q2, recovering from a 0.2% decline in Q1. In the year to Q2, the import price index rose 1.3%.

Share Markets: 

US markets were subdued as investors pondered the pace of economic growth, corporate earnings and the potential for a hike in the Fed funds rate.

Both the Dow and the S&P500 were flat while the Nasdaq posted a 0.3% gain. In Europe, the mood was brighter with some better than expected earnings results.

The FTSE100 and the French CAC40 rose 0.6%, the Dax was up 0.4% and the Euro Stoxx rose 0.2%.

Interest Rates: 

US 10 year government bond yields fell 3 basis points to 2.26% as economic growth in the US remained modest.

The economy is picking up rather than blasting off (see below).

US 2 year yields rose 2 basis points to 0.73%.

In Europe, a weak outcome for German inflation (see below) saw long bond yields fall 7 basis points to 0.65%. Yields in Australia edged higher.

Australian 10 year government bond yields rose 5 basis points to 2.84% while the 3 year yields also lifted 5 basis points, to 1.94%. 

This was despite soft numbers for building approvals (see below)

Foreign Exchange:

The AUD was softer in the early part of the overnight session but lifted later in the night following the US GDP numbers and also possibly impacted by firmer iron ore prices.

The AUD/USD opens roughly where it began yesterday. The US dollar index firmed on the prospect of a rate rise later this year.


Gold continued to move lower in the face of concerns about demand from China and the prospect of higher interest rates in the US.

Oil was weaker on the back of a stronger US dollar while copper also retreated on Chinese demand concerns. The price of iron ore moved up to US$57 per tonne.


No major data released.


German CPI fell to 0.2% in the year to July from 0.3% in the year to June.  Inflation remains very low and underscores the need for continuing ECB stimulus.


Industrial production rose 0.8% in June, beating the median estimate of a 0.3% rise. The modest rebound in June from May's 2.1% fall left industrial production up 2.0% on June last year.

New Zealand:

Building permits fell 4.1% in June after remaining unchanged in May. In the year to June, building permits were up 2.0%.

United Kingdom:

No major data released.

United States:

US GDP grew at an annualised pace of 2.3% in Q2, lower than the 2.5% estimate, but Q1 was revised higher from -0.2% to +0.6% resulting in first half growth beating expectations.

Consumption growth accelerated from 1.8% to 2.9%. Overall the data supports the case for Fed tightening this year.

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