AIG Construction Index lost pace in September


The AiG performance of construction index fell to 51.9 in September, from 53.8 in August. This reflected declines in the activity, new orders, employment and selling prices components. 

The index remains above 50 signalling expansion in construction activity.

Share Markets:

Positive sentiment boosted equity markets overnight, although the session was volatile.

Again, there was little to trigger the more upbeat mood, but suggests that the recent sell-off may have been overdone.

The Dow closed 0.7% higher, while the S&P500 rose 0.8%.   

Interest Rates:

US treasuries fell, as the rebound in risk appetite weakened demand for safe-haven assets.

The yield on 10-year treasury notes lifted 3 basis points to 2.06%.

Yields on Australian 10-year bonds (based on futures) rose 5 basis points to 2.71% and on 3-year bonds lifted 3 basis points to 1.85%.

Foreign Exchange:

The US dollar edged slightly higher, in step with stronger risk appetite in equity markets, while the euro and yen weakened.

GBP also gained on a rebound in industrial production data.

The Australian dollar continued to benefit from the rebound in sentiment and climbed back above 72 US cents. 


Commodity prices were mixed, despite the pickup in sentiment. Oil prices edged slightly lower on the back of a lift in US crude inventories, but follows strong gains over the past few days.

Gold prices were also lower on a stronger US dollar.


German industrial production fell 1.2% in August versus market expectations for a 0.2% gain.

The drop in August was the largest monthly decline in a year.

Activity appears to have weakened over the last few months.


The Bank of Japan left its annual increase in the monetary base unchanged at ¥80trn, which was in line with consensus expectations, despite an economic contraction in the June quarter.

The Board again voted 8-1 in favour of maintaining the pace of expansion.

The dissenter, Takahide Kiuchi, proposed that monetary base expand at an annual pace of ¥45trn.

United Kingdom:

Industrial production lifted 1.0% in August, comfortably exceeding expectations for a 0.3% gain.

The rebound is encouraging, and follows two consecutive months of declines over June and July.

United States:

Consumer credit rose $16.0bn in August, the smallest gain in six months. 

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