Approvals & Credit increase chance of rate rise

I'm all but ready to throw in the towel on interest rates. After today more evidence has accumulated to justify the RBA moving on rates in August.

Today the Australian Bureau of Statistics reported that building approvals rose 7.5% to 12,953 units in June, seasonally adjusted, from an upwardly revised 12,048 units in May. Economists had forecast an increase of 2%. in June.

June approvals were driven by a 22.1% increase in the volatile multi-unit dwelling segment. Private sector approvals rose 1.2%.

The consensus is that whilst it is too early to get excited about a housing boom in the face of possible interest rate rises, the housing sector is going through a consolidation phase.


Credit demand surges in June

The RBA's monthly credit report showed overall credit jumped 1.8% in June, driving the annual rate to 15.4%. Economists had expected credit to rise 1.2 per cent in June.

Data showed housing credit rose 1.5% in June, taking the annual rate to 13.2%, personal credit grew 3.6% to an annual rate of 15.3% and business credit jumped 1.9% to an annual rate of 18.7%.

Financial markets are betting on a better than 50% chance of a rise in the RBA's official rate on August 7th. Looks like I'll have to concede defeat on this one.