Australia building approvals responses coming in - risk of sharp correction lower
The Australian data earlier was a huge beat, with a subsequent marking up for AUD/USD:
Response coming in now from Westpac (in brief, bolding mine):
- Dwelling approvals continued to surprise to the upside in November
- November's uplift was driven by a jump in Victorian approvals ... increase in Victoria was concentrated in private apartment approvals, in particular the high rise component (four or more storey blocks).
- However, the high rise series is typically volatile, and November's surge likely reflects a lumpy project pipeline. This raises the risk of a sharp correction lower in apartment approvals in coming months even though Victoria has been seeing strong population growth.