Release Explanation: This report tracks developments in the number and value of outstanding home loans in Australia. Home Loans are a measure of activity in the housing market. The figure acts as a gauge for consumer confidence, since consumers usually take out large loans only when they have sufficient saving or believe they will be able to pay them back in the future.
The sales of a new home usually trigger a sequence of consumption. In addition to the high expenditure of the new home, buyers are likely to spend more money on furnishing and customizing their home. Consequently, growth in the housing market spurs more consumption, generating demand for goods, services and the employees to provide them. Thus an n increase in loans may forecasts growth in the economy.
Trade Desk Thoughts: Home loans in Australia grew by 1.3 percent in October which was slightly above forecasts of a 1.0 percent increase. Septembers figure was revised upward, from -2.7 percent to -2.4 percent. Investment lending also grew by 0.7 percent which is against speculations of a -2.0 percent decline. The value of loans saw a 2.4 percent increase month over month.
Forex Technical Reaction: The Australian dollar has not been able to rise above the .6600 area after the news item was released. The pair is currently trading 10 pips above the neutral pivot point.